More banks cut dollar interest rate

More commercial banks have cut deposit interest rates for the US dollar by 0.1-0.4 percentage points, showing that the State Bank’s tighter rules on dollar lending are taking effect.

Sacombank is offering 4.62 per cent per year for six-month deposits under US$10,000 and 4.5 per cent for all other terms above and below six months for the same amount.

For bigger deposits, the highest interest rate was 4.88 per cent for two-three month terms and less than 4.7 per cent for all other terms, above and below. Terms deposits under a month were being offered less than 1 per cent.

The state-owned Agribank has cut its highest interest rate from 5.55 per cent to 5.3 per cent for a nine-month term. Terms of 18-24 months would earn 4.7-4.8 per cent; all other terms 5-5.2 per cent.

Earlier, Eximbank, Kienlong Bank, VietinBank, PG Bank, SeABank, VietABank have cut dollar deposits interest rates by 0.1-0.25 percentage points.

“The reduction is not so strong because banks are very cautious to balance capital as well as see the effects of the Government’s policy in the inflation fight,” said Nguyen Thanh Toai, deputy general director of Asia Commercial Bank.

Some bankers had plenty of dollars but had to restrict their loans.

The downward trend in the dollar interest rate came after the central bank tightened dollar lending rules, allowing only short-term funding to be extended to exporters. Importers would be able to use all types of loans if they could prove their repayment abilities.

The regulation, effective from May 9, was aimed at stopping the upward trend in US dollar interest rates which occurred in early March after the central bank delivered a strong message to keep the Vietnamese dong ceiling deposit rate at 14 per cent per year.

In March, Viet Nam’s inflation hit 13.89 per cent, the biggest annual increase in 25 months, despite monetary tightening and plans for scaled back fiscal spending. — VNS

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