Commercial banks have reported a sharp fall in deposits as interest rates are now at a 10-year low and people seek other investment channels.

Commercial banks have agreed to slash the lending interest rate in order to help businesses and people overcome the difficulties caused by the Covid-19 crisis.

After many months of staying at low levels, deposit interest rates at banks have increased since late May.

Recently, the interbank interest rates suddenly jumped, causing many people to worry whether bank lending rates will increase in the coming time while the business and production activities have been facing many difficulties due to Covid-19.

The latest Covid-19 outbreak has pushed enterprises into new difficulties at a time when it is nearly impossible to access cheap capital sources.

Interest rates are the most important focus of attention this year as many believe after a year implementing the loose monetary policy, the authorities concerned are going to tighten them.

As of March, the total value of G-bonds reached more than VND1,340 trillion ($58.3 billion), slightly down 0.7% against late 2020.

The year 2020 has seen a ‘bond issuance movement’. Businesses have rushed to issue shares to mobilize capital as loose requirements made it easier than ever to do this.

Given abundant liquidity and low demand for credit, banks are offering attractive loans during the year-end period.

Since the outbreak of the COVID-19 pandemic in January, the State Bank of Viet Nam (SBV) has slashed rates three times.

A number of commercial banks are going to list their shares at the HCM City Stock Exchange (HOSE), and are expected to bring a breath of fresh air to the market, which has been stagnant because of the pandemic.

The State Bank of Vietnam (SBV) on September 30 announced its decision to lower the benchmark interest rate as part of efforts to support the national economy amid difficulties posed by the COVID-19 pandemic.

The State Bank of Vietnam (SBV) has issued decisions No. 1349 and 1351 on cutting interest rates applicable to compulsory reserves deposited at the central bank by credit institutions, 

Credit demand in Vietnam is expected to stay low in the foreseeable future as the Covid-19 pandemic continues to be complicated globally, said a central banker.

Vietnam needs effective changes and reforms to attract more foreign portfolio investment, Andy Ho, chief investment officer of investment fund VinaCapital, has said.

With fewer concerns about currency and external stability, Vietnam’s central bank is likely to be more comfortable with delivering interest rate cuts to support growth.

The Vietnam Technological and Commercial Joint Stock Bank (Techcombank) has announced a 30 trillion VND (over $1.28 billion) credit package to support its customers to overcome difficulties amid the COVID-19 pandemic.

Banks’ nine-month financial reports show that bad debts have increased compared with the beginning of the year, though the bad debt ratio has fallen.

Several local banks have reduced their interest rates in recent days, going against the banking sector’s general year-end trend of increasing rates to boost earnings.

Some small banks in Vietnam are seeking investors from Asia such as South Korea, China and Japan.