Banks hike deposit rates for liquidity

Hanoi (VNA) - During the run-up to Tet many ​ban​ks have ​increased deposit rates to sustain liquidity.

Sacombank has hiked the rates on two- and six-month deposits by 0.1 and 0.2 percentage points to 5 percent and 5.9 percent.

DongABank hiked the rates on one- and six-month deposits by 0.1 and 0.3 points to 5 percent and 5.5 percent.

Some other banks have also increased the rates by 0.1-0.3 points.

Besides, banks are also scrambling to launch lucrative promotion programmes to attract deposits.

Vietinbank is offering bonuses of nearly 8 billion VND to depositors, SHB has earmarked 7.2 billion VND.

Market observers said many banks face liquidity pressure though the State Bank of Vietnam is pumping in a lot of money through open market operations (OMO).

A major part of almost 55 trillion VND were absorbed by the banks as of January 16.

The observers attributed the low liquidity to the fact that banks had to out a lot of money to enterprises and financial institutions, something that often happens a few weeks before Lunar New Year.

But other analysts dismiss the claim of low liquidity, pointing to banks’ transactions in the last few months of 2016. Most lenders had enough liquidity, with some even having plentiful cash, that they were ready to meet the payment demands of the market.

This was also proved by the fact that interest rates kept falling on the inter-bank market.

The liquidity helped the government successfully issue bonds totally worth 281 trillion VND.-VNA