US dollar saving rate at below 2pct pa for all terms

Pursuant to the State Bank of Vietnam (SBV)’s decision on lowering the US dollar saving rate cap, from early June, almost big and small banks adjusted down the US dollar deposit rate at 2 percent per annum (p.a) for terms of from one month and longer.
At SCB, the maximum interest rate of 2 percent pa is for 2-5 month terms and it is only 1.86-1.87 percent pa for longer terms.

Some banks such as Vietnam Export Import Commercial Joint Stock Bank (Eximbank-EIB) applies the US dollar deposit of 2 percent pa for only savings choosing term of receiving interest. As for common savings, the deposit rate of 2 percent is for only terms of 18 months and longer and it is 1.9 percent pa for 1-12 month terms and 0.3-0.8 percent pa for 1-3 week terms.

Vietnam Technological and Commercial Joint Stock Bank (Techcombank) is offering the US dollar saving rate at 1.75 percent pa for 1-6 month terms and it is only 16 percent pa for 7-9 month terms and 1.55 percent pa for 10-11 month terms.

In recent months, together with the tighten policy of foreign currency source, the US dollar deposit rate decreased from over 6 percent pa to 3 percent and then 2 percent pa from June 2.

In addition, the foreign currency source at banks also tend to fall slightly, many enterprises sold US dollar to banks to receive the dong for making deposits to enjoy higher saving rate (the difference is up to 16 percent per year).

Along with reducing the US dollar interest rate, the central bank also raised the compulsory reserve ratio in foreign currency by 1 percent, causing more expensive costs of foreign currency capital for credit institutions.

According to banks, the further reduction of US dollar deposit rate will encourage people to keep the dong and stabilise the forex rate. – Vnexpress

Tags: US dollars, Vietnam banking industry, Vietnam finance, Vietnam financial