Banks expect Q4 interest rate hikes

By Dat Nguyen October 7, 2022 | 03:20 am PT

An employee counts Vietnamese banknotes at a bank in Hanoi. Photo by VnExpress/Giang Huy

Most commercial banks expect deposit and lending interest rates to rise in the fourth quarter this year, a survey by the State Bank of Vietnam has found.

The central bank’s survey, which polled 96% of all domestic and foreign lenders in Vietnam between August 25 and September 10, found that over 59% expect rates to go up by an average 0.37% points per annum in the last quarter this year.

Over 66% of lenders anticipate that the average rate increase will be 0.56% points per annum.

In the last four weeks, more than 30 lenders have increased their deposit interest rates by up to 1.9% points.

Some are offering 7.45% per annum for 12-month deposits.

The central bank survey also found that 88.3% of lenders expect positive pre-tax profit growth this year while 6.8% anticipate a decline.

They estimate forecast capital mobilization growth for the year at 10.2%, lower than the credit growth of 14.9%.

The State Bank of Vietnam (SBV) last week used open market operations to pump VND28.1 trillion ($1.18 billion) into the market and sold foreign currencies worth VND35 trillion.

Tight liquidity has caused interest rates on loans to increase sharply. On Tuesday, the overnight interest rate surged to 8-9% per year. It was around 7.5% per year for other terms.