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VietNamNet Bridge – Not only raising the gold deposit interest rates,
commercial banks have also raised the non-dollar deposit interest rates, the
thing that no one thought it would happen.
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In general, banks only pay low interest rates of 0.1-0.5 percent per annum to non-dollar deposits, while a lot of banks refuse non-dollar currencies, because in Vietnam, the US dollar remains the most popular foreign currency, and the US dollar is always the main currency for making payment for imports and exports.
Therefore, no one could imagine before that the non-dollar deposit interest rates would increase, especially at this moment, when the dollar price keeps increasing sharply.
However, the unimaginable thing is happening. Since November 15, Eximbank offered the interest rate of 3 percent per annum for 12-month term euro deposits instead of the 1-2 percent rates applied before.
However, this interest rate is still lower than that offered by smaller banks. Tin Nghia Bank, for example, is paying 3.1-3.2 percent per annum for 12-24 month term deposits. The highest non-dollar deposit interest rate is being offered by SCB, which is paying 4 percent per annum for 12-24 month term deposits.
Not only the euro deposits, Australian dollar deposit interest rates have also increased significantly after the Hong Kong and Shanghai Banking Corporation (HSBC) Vietnam began applying the rate of 4 percent one month ago. Meanwhile, Eximbank is paying 3.5-3.7 percent per annum for short term 1-3 month deposits, and 3.8 percent for 6-9-12 month deposits.
SCB is also paying high for Australian dollar deposits, at 3.5-3.8 percent per annum for 1-12 month deposits, while Tin Nghia Bank is paying 3.8 percent for the 6-24 month deposits.
Commenting about the banks’ move, a finance expert in HCM City said that when making decision to raise interest rates, banks have to consider the factors on the Vietnamese and the world market, and the tendency of the currencies as well.
The representative of HSBC has agreed with the viewpoint, affirming that one of the reasons behind the bank’s decision to raise Australian dollar interest rates is that it needs to follow the tendency in the world. “The interest rate of the currency is relatively high in the world market, therefore, we have to adjust the interest rate of the currency in Vietnam,” he said.
Meanwhile, Dr Le Tham Duong from the HCM City Banking University thinks that since the State Bank now sets a cap on the dollar deposit interest rate (the ceiling interest rate is 2 percent per annum), commercial banks try to mobilize in other foreign currencies by pushing the interest rates up.
“As the State Bank intervenes the market with administrative orders (imposing ceiling interest rates for dong and dollar deposits – reporter), the interest rates of some currencies will reduce, but the interest rates of other currencies will increase,” Duong said.
At present, the central bank only imposes a cap on dong and dollar interest rates; therefore, banks have raised the gold and non-dollar deposit interest rates.
The move by the banks has raised a worry that people would withdraw dong deposits from banks to convert into euro or Australian dollar to enjoy higher interest rates. However, Dr Duong believes that it is not very likely to see that on the Vietnamese market.
Duong thinks that the current dong interest rate of 14 percent is still attractive, while the euro or Australian dollar are not the favorite foreign currencies to Vietnamese people.
Source: VnExpress
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