Top banker expects deposit interest rates to edge up in H2

By Quynh Trang May 23, 2024 | 11:19 pm PT

Dinh Duc Quang, country head of global markets, Singapore-owned United Overseas Bank Vietnam, speaks at a market forecast and investment strategy seminar on May 23, 2024. Photo courtesy of UOB

Bank deposit interest rates could increase by up to 1 percentage point in the second half of this year from the current 5%, a senior banker said.

The rates would climb up in line with international markets, and bank deposits would have similar yields as other asset classes, Dinh Duc Quang, country head of global markets, Singapore-owned United Overseas Bank Vietnam, said at a market forecast and investment strategy seminar on Thursday.

The rates for short-term deposits recently edged up by 0.2-0.3 percentage points.

Credit growth as of the end of April was below 2%, low compared to previous years, according to the State Bank of Vietnam.

Quang said credit growth is usually low in the first quarter before gathering pace in the second.

According to UOB, the Vietnamese dong could weaken to VND25,600 against the dollar in the second quarter before gradually rallying to VND24,600 in the first quarter of next year.