High capital demand from commercial banks raised the borrowing interest rates in the interbank market in the last week of 2013, the central bank's statistics showed.

The value of the total transactions in Vietnamese dong reached 128.5 trillion VND (6.1 billion USD) and those in US dollars was 2.8 billion USD.

Overnight and one-week terms accounted for up to 77 percent of all transactions in dong and the greenback.

Interest rates charged for dong loans for one month were up by 0.79-2.23 percentage points, while those for US dollar loans, ranging from one-month to three-month loans, rose by 0.19-0.35 percentage points.

The increase was blamed on the growing capital demand before the end of the year when all payments were due and on enterprises importing materials for domestic production, as well as trade companies importing products for the Tet sale season. Moreover, banks were also accelerating plans to expand outstanding loans to hit the targeted credit growth.

The State Bank of Vietnam Governor Nguyen Van Binh recently instructed credit institutions to prepare an adequate supply of cash, particularly at ATMs in major cities and industrial zones.

Labourers in industrial zones often line up in front of the ATMs, hoping they will not run out of cash or incur technical problems. The demand for cash always skyrockets with the approach of the longest and most important annual festival in Vietnam , which will fall at the end of January this year.

Many ATMs in HCM City are often overloaded. Dao Minh Tuan, deputy head of Vietcombank, told Dan Tri online newspaper that they are planning to refill the machines three times a day this year, while the machines in industrial zones will be refilled six to seven times per day.

However, he added, due to the holiday traffic, these refills may be delayed at times.-VNA