Short-term loans were estimated to rise 16.8 per cent while the increasing rate of medium- and long-term loans was 20.9 percent (Source: vietstock.vn)

Credit in Hanoi has surged sharply, roughly doubling the average rate of the entire banking system.

According to the municipal Statistics Office, total outstanding loans of the capital in the first nine months of the year is estimated to reach 1,195.9 trillion VND (53.15 billion USD), up 18.3 percent against December last year.

Short-term loans were estimated to rise 16.8 percent while the increasing rate of medium- and long-term loans was 20.9 percent.

Total capital mobilisation in the period rose 11 percent, reaching 1,321.8 trillion VND (58.74 billion USD).

As the credit growth rate was much higher than that of capital mobilisation, commercial banks have to continuously increase deposit interest rates to attract depositors in a move to balance deposit and credit sources.

Sacombank continuously inched up its deposit interest rate by 0.1-0.2 percentage points per year. This was the third interest hike of the bank since August this year. The bank's highest rate of 7.55 percent is applied for 13-month deposits.

Eximbank early this week also released the new interest rate level with a rise of 0.1-0.2 percentage points per year for some terms, effectively from September 21. The bank's highest rate was 7.5 percent, which is applicable for 13-month deposits.

Previously, An Binh Bank, VIB and SeaBank also increased the deposit interest rates by 0.2-0.3 percentages points per year for some terms.

Economist Dinh The Hien suggested that the Government should take more measures to better control the deposit rate hike. Avoiding it could cause lending interest rates to rise in the near future.

It was contrary to the government's guidance in cutting lending interest rates to support domestic business and production, Hien said.-VNA