Local banks are expected to cut interest rates further sometime thisyear as deposits have been increasing while credit growth has remainedsluggish, the Saigon Times Daily reported.
A new round ofinterest rate reductions is just a matter of time as government bondyields and interest rates on the inter-bank market have kept falling. Asof April 22, the banking system reported a deposit growth rate of 3.09percent while its lending inched up a mere 0.62 percent, the Daily citedthe central bank as saying.
Furthermore, there have been no positive signs in banks’ cash flows, signaling yet another round of interest rate cuts.
InApril, the Hanoi Stock Exchange held 19 bond auctions, raising over13.2 trillion VND. However, the bond volume on the primary markettumbled 62 percent against the previous month.
Coupons hoveredaround 5.58-5.69 percent per annum for two-year bonds, 6.07-6.9 percentper annum for three-year debt papers, 7.12-7.8 percent for the five-yeartenor, and 8.7 percent for the 10-year term. They declined by 0.4 to0.41 percentage points per annum against March.
Since early thisyear, the State Treasury has mobilized over 80.6 trillion VND fromG-bond sales. The agency is the issuer of around 90 percent of G-bonds.
However,last week’s winning coupons of two, three and five-year G-bonds dropped10 to 20 basic points against the week before. G-bond investorsestimated that bond yields would move flat or drop slightly in the nextfew weeks.
Bond yields on the secondary market have stood at5.6-5.8 percent, 6.07-6.3 percent and 7.12-7.25 percent per annum fortenors of two, three and five years respectively.
Statistics ofbanks showed that credit institutions did not show up at auctions on theopen market for the second straight week before the national holidaysof Vietnam Reunification Day and International Labor Day that ended onMay 4.
Meanwhile, the central bank still offered 1 trillion VNDeach session with a coupon of 5.5 percent per annum for the seven-daytenor. The week before the holiday also saw no loans falling due on theopen market.
Given slow credit growth and huge surplus capital,banks have no demand to take out loans through open market operations orpurchase bonds.
Interest rates on the inter-bank market havebeen in decline for short tenors while long-term rates have remainedunchanged. The overnight rate has been 1.65 percent per annum, one weekat 1.9 percent, two weeks at 2.2 percent, dropping 0.15 to 0.3percentage points against the previous week respectively. Meanwhile, theone-month rate has stayed unchanged at 3.35 percent per annum.
Large banks have continued to offer loans on the open market with most transactions focusing on tenors below one month.-VNA
A new round ofinterest rate reductions is just a matter of time as government bondyields and interest rates on the inter-bank market have kept falling. Asof April 22, the banking system reported a deposit growth rate of 3.09percent while its lending inched up a mere 0.62 percent, the Daily citedthe central bank as saying.
Furthermore, there have been no positive signs in banks’ cash flows, signaling yet another round of interest rate cuts.
InApril, the Hanoi Stock Exchange held 19 bond auctions, raising over13.2 trillion VND. However, the bond volume on the primary markettumbled 62 percent against the previous month.
Coupons hoveredaround 5.58-5.69 percent per annum for two-year bonds, 6.07-6.9 percentper annum for three-year debt papers, 7.12-7.8 percent for the five-yeartenor, and 8.7 percent for the 10-year term. They declined by 0.4 to0.41 percentage points per annum against March.
Since early thisyear, the State Treasury has mobilized over 80.6 trillion VND fromG-bond sales. The agency is the issuer of around 90 percent of G-bonds.
However,last week’s winning coupons of two, three and five-year G-bonds dropped10 to 20 basic points against the week before. G-bond investorsestimated that bond yields would move flat or drop slightly in the nextfew weeks.
Bond yields on the secondary market have stood at5.6-5.8 percent, 6.07-6.3 percent and 7.12-7.25 percent per annum fortenors of two, three and five years respectively.
Statistics ofbanks showed that credit institutions did not show up at auctions on theopen market for the second straight week before the national holidaysof Vietnam Reunification Day and International Labor Day that ended onMay 4.
Meanwhile, the central bank still offered 1 trillion VNDeach session with a coupon of 5.5 percent per annum for the seven-daytenor. The week before the holiday also saw no loans falling due on theopen market.
Given slow credit growth and huge surplus capital,banks have no demand to take out loans through open market operations orpurchase bonds.
Interest rates on the inter-bank market havebeen in decline for short tenors while long-term rates have remainedunchanged. The overnight rate has been 1.65 percent per annum, one weekat 1.9 percent, two weeks at 2.2 percent, dropping 0.15 to 0.3percentage points against the previous week respectively. Meanwhile, theone-month rate has stayed unchanged at 3.35 percent per annum.
Large banks have continued to offer loans on the open market with most transactions focusing on tenors below one month.-VNA
