Reference exchange rate unchanged for second day

 

 

Reference exchange rate unchanged for second day

The daily reference exchange rate of VND/USD was kept unchanged for the second day on March 23, at 22,253 VND per USD.

With the current trading band of +/-3 percent, the ceiling rate applied to commercial banks is 22,912 VND and the floor rate 21,585 VND per USD.

The opening hour rates at commercial banks dropped slightly from March 22.

At BIDV, both rates went down by 10 VND to 22,735 VND (buying) and 22,805 VND (selling) per USD.

BIDV listed its buying rate at 22,730 VND per USD (down 15 VND) and selling rate at 22,815 VND (down 5 VND).

Meanwhile, the buying rate at Vietcombank was 22,740 VND and selling rate 22,810 VND per USD, both down 10 VND from March 22.

Dong savings rates rise to new highs

 

Interest rates for savings in dong have unexpectedly shot up, with certificates of deposit (CD) carrying an interest rate of up to 9.2 percent a year, according to a Vietnamnet report.

Less than two months after its offering of attractive interest rates, some 10 basis points higher than previous levels, VPBank has hiked interest rates sharply.

Instead of 7.5-7.9 percent applicable from January 1, VPBank on March 9 began offering an interest rate of 9.2 percent for individual clients who receive interest upon maturity but to enjoy this rate, customers must put over VND5 billion in their savings accounts with a 60-month tenor. For other tenors, interest rates range from 7.5 percent to 9.1 percent.

Many other commercial joint stock banks in the past two weeks have revised up their interest rates for all terms, especially long ones.

Sacombank has launched a programme offering an interest rate of 8.88 percent for seven-year certificates of deposit and 8.48 percent for the five-year tenor. LienVietPostBank plans to raise trillions of dong, so it offers deposit interest rates of up to 8.8 percent.

Recently, Eximbank began calling for savings of 24-36 months with an interest rate of 8 percent which is paid upon maturity. NCB has adopted similar interest rates to lure depositors.

Most CDs come with tenors of several years but some banks such as VietABank borrows for a period of six to 18 months with an interest rate of up to 8.2 percent. The face value of such CDs has also been brought down to around VND1 million each.

Certain banks such as DongABank and Saigon Commercial Bank (SCB) have even rolled out attractive interest rates of 5.4-5.5 percent for short tenors of 1-4 months. Deposits of 6-9 years attract an annual return of 6.9 percent.

State-run banks like Vietcombank, VietinBank, BIDV and Agribank are now applying lower interest rates but as high as 4.3-4.8 percent for 1-4 month terms. The average interest rate offered by this Big Four is about 50 basis points lower than joint stock banks.

In recent years, banks have kept deposit rates at low levels, sometimes below 5 percent per year. With the latest market development, lending rates will certainly soar in the near future.

Huynh Minh Tuan, head of brokerage at the HCM City branch of Vndirect Securities, said it was inevitable that deposit rates had edged up across the board. To raise new capital for the new year, banks have had no other choice but to hike interest rates.

In addition, the US dollar has been strengthening against the dong since US interest rates were recently hiked by the Federal Reserve, leading to dong interest rates to inch up.

Tuan noted that when the greenback rises, interest rates for both savings and loans in the local currency will rise to new levels that are about one percentage point higher than previously.