Many banks increase US dollar saving rates

After the dong saving rate reached the stability around 14 percent per year in line with the consensus of Vietnam Banking Association (VNBA)’s bank members, many started to increase the US dollar deposit rate.

From January 8, 2011, Western Commercial Joint Stock Bank (Western Bank) raised the US dollar deposit rate in short terms whereby the one month term will enjoy the interest rate of 5 percent per annum, two months at 5.1 percent pa and three months at 5.3 percent pa.

Southeast Asia Commercial Joint Stock Bank (SeABank) also adjusted up the US dollar saving rate to the highest level at 6 percent pa. At the others such as KienLongBank, Orient Bank, SCB and ABBank, the highest US dollar saving rate is at 5.1-5.6 percent pa.

Only at big banks with the advantages on payment and funding for export import activities such as EximBank, ACB and Sacombank, the US dollar saving rate is kept at below 5 percent pa.

Representative from banks said that in order to increase the market share, especially at the time of the last days to Tet holiday, along with huge inward remittance sent to Vietnam, banks adjusted up the interest rate to attract US dollar.

Do Lam Dien, deputy general director of Maritime Bank, said that banks are increasing US dollar mobilisation to partly prepare for their business plans in 2011 and meet increasing demands for US dollar of enterprises.

According to Le Dang Khoa, deputy general director of Western Bank, during recent three months, the lending rate between the dong and US dollar saw a far gap, so borrowers switched to borrow US dollar. Therefore, the US dollar deposit rate started edging up at banks.

In addition, recently, the total number of customers of Western Bank’s international settlement segment has increased sharply, so the bank also needs to increase the US dollar source.

Khoa added, in short term, enterprises would also prefer borrowing US dollar because presently, the difference on the lending rate between dong and US dollar is up to 12 percent per year and in short terms, the dong could not devalue up to 12 percent against the US dollar. So, many firms, especially exporters choose to borrow US dollar.

At present, the US dollar lending rate at banks is about 7-8 percent per annum while the dong loan rate is at 17-18 percent per year for enterprises.

Till the end of 2010, banking sector’s credit growth was 27.6 percent against the end of 2009, of which, total outstanding loan in dong was up 25.3 percent and in US dollar up 37.7 percent. – Vietbiz24

Tags: US dollar saving rates