Liquidity pressures remain

At the Government’s regular August 2026 press briefing, a representative of the Ministry of Finance said short-term liquidity in the banking system had improved. As of August 22, VND deposits had risen 8.77 percent from the beginning of the year, higher than the 8.38 percent growth in outstanding credit.

However, by September 3, the relationship had reversed, with credit growth reaching 9.98 percent while deposits increased by only 8.33 percent. This shows that banks are still facing pressure to balance their funding sources.

Bao Viet Securities Company (BVSC) said interest rates in September would likely remain broadly unchanged at current levels, while liquidity pressures would persist.

According to BVSC, deposit growth lagging behind credit growth is putting pressure on banks’ funding.

At the same time, credit demand is expected to remain high as a number of large-scale infrastructure projects are set to get underway. Major central banks have not fully shifted toward monetary easing, while domestic regulators still have tools to support liquidity, including open market operations (OMO) and foreign-exchange swaps, along with efforts to accelerate public investment disbursement.

“Credit growth of 9.98 percent, which is significantly higher than deposit growth of 8.33 percent, shows that liquidity pressures have not truly eased and that there is limited room for deposit rates to continue falling. In the Government bond market, the low bid-winning rate amid stable yields reflects investors’ continued demand for higher yields,” BVSC said.

In reality, the banking system remains heavily dependent on short-term funding. Meanwhile, demand for medium- and long-term capital for infrastructure and technology investment and business expansion remains high, requiring banks to maintain an appropriate funding balance.

The key issue is not “how much interest rates rise or fall”

According to Dr. Nguyen Van Loc from Phenikaa University, there is limited room for deposit and lending rates to decline from now until the end of the year.

“The more likely scenario is for interest rates to remain at current levels, with localized increases at some banks, for certain maturities or customer groups, rather than a broad-based cycle of sharp increases across the system,” Loc said.

According to him, four main factors are driving this trend.

First, credit growth is currently outpacing deposit growth. As the economy’s demand for capital continues to rise in the final months of the year, banks will have to compete more aggressively for deposits. This makes it difficult for funding costs to fall and creates a “floor” for deposit rates.

Second, the fourth quarter is typically a period of high credit and liquidity demand, as businesses raise working capital, stock up on goods, increase production and prepare for the year-end business season. 

Therefore, even if system-wide liquidity remains broadly manageable, individual banks may face different funding pressures, leading to localized interest-rate adjustments.

Third, domestic interest rates remain constrained by exchange rates, inflation and the international interest-rate environment. If major central banks continue to pursue cautious or tighter monetary policies, alongside pressure from energy prices and geopolitical developments, Vietnam will have less room to cut interest rates significantly. 

Monetary policy must at this point balance multiple objectives: supporting growth while controlling inflation, stabilizing the exchange rate and ensuring system-wide financial safety.

Fourth, lending rates typically lag behind deposit rates. When funding costs have not fallen, it is difficult to expect lending rates to decline sharply across the board. Banks can still offer preferential credit packages for priority sectors or high-quality customers, but this does not mean overall market lending rates will fall by a corresponding amount.

“Therefore, I believe the likelihood of a deep decline in interest rates between now and the end of the year is low. A more reasonable scenario is for rates to remain at relatively high levels and edge up selectively in some segments. 

However, there is no need to be overly concerned about a sharp rate-hike cycle, as policymakers still have tools to support liquidity and the goal of supporting economic growth,” Loc said.

According to him, the most important issue is not the question of “how much interest rates will rise or fall,” but rather the balance between credit growth and the banking system’s ability to mobilize funds. If credit continues to grow faster than deposits in the coming months, pressure on interest rates will remain.

Tuan Nguyen