VietNamNet Bridge – The country's consumer price index (CPI) in June is set to increase between 0.5 and 0.6 per cent against the previous month, according to the Vietcombank Securities Co (VCBS).

Customers shop at Co.op Mart Supermarket in Ha Noi. The country's CPI in June is set to increase between 0.5 and 0.6 per cent against the previous month.

The anticipated hike is significant when compared to the rise in the past few months. According to the General Statistics Office, CPI's rise was low at 0.08 per cent in April, 0.2 per cent in May and – 0.44 per cent in March.

VCBS said that the hike in health-care service fees in HCM City from June 1 will probably push up the city's CPI in the month by 5.2 per cent. According to a decision by the HCM City's People Committee, higher charges will be applied to 2,000 types of medical services, including check-ups, beds for in-patients and technical services as well as surgery costs, in the city's 378 public hospitals.

With this year's inflation anticipated to be roughly 5 per cent, VCBS said that it would be difficult for the central bank to further cut the deposit interest rate next month.

Lending rates will be also unchanged, and so will exclusive old loans with high rates of more than 13 per cent, if the capital mobilisation source of commercial banks remains stable, as is currently the case, it said.

Director of the central bank's Monetary Policy Department, Nguyen Thi Hong recently also affirmed that the central bank will maintain the current deposit interest rate until the end of the year, provided there is no sudden change in the CPI.

Hong said that commercial banks might reduce the lending rate by 1 to 2 per cent this year if conditions permit.

In a report on banking activities in the week ending May 30, the central bank said that deposit and lending interest rates in dong continued to be stable.

It said that commercial banks offered dong deposit interest rates at 0.8 to 1 per cent per year for demand deposits and those less than one month; 5.5 to 6 per cent for term deposits from one to six months and 6 to 7.5 per cent for deposits between six months and a year. They also offered 7.5 to 8.3 per cent for deposits with a maturity period of over one year.

Lending interest rates in domestic currency for five prioritised sectors, including agricultural producers, exporters, small and medium-sized enterprises (SMEs), supporting industries and hi-tech businesses were between 7 and 8 per cent. Other sectors were charged lending rates of 9 to 10 per cent for short-term loans and 10.5 to 12 per cent for medium and long-term loans.

Businesses with healthy and transparent financial positions and viable business plans could borrow at 6 to 7 per cent per year.

Source: VNS