SBV believed not to lower key interest rates
09-10-2012 12:43:49+07:00
SBV believed not to lower key interest rates
Finance institutions believe that the State Bank of Vietnam (SBV) would not slash key interest rates further, because the government needs to be sure that the inflation rate in 2012 would be at one-digit level.
How the interest rates will perform in the three last months of the year is the thing that most businesses want to know to set up their business plan.
The consumer price index (CPI) in September unexpectedly increased by 2.2 percent over the previous month and by 6.48 percent over the same period of the last year. The surprisingly high CPI increase, according to BIDV Securities Company (BSC), would cause negative impacts on the investors’ feelings.
“The worrying thing is that the high CPI increase may make it more difficult to curb the inflation rate at one-digit level,” the report of the company said.
Meanwhile, Tran Thi Thanh Thao from MB Securities Company said on Lao dong that in order to successfully restrain the inflation rate at one-digit level, the State Bank of Vietnam would not slash key interest rates further.
However, finance analysts all think that the lending interest rates would go down further in the last months of the year.
The analysts have given the prediction after considering the low credit growth rates in the first months of the year.
The report of the MB Securities (MBS) has pointed out that bad debt would still be a big hurdle to the credit growth in the time to come. Despite the sharp interest rate reductions, the disbursement would not increase sharply because very few businesses can satisfy the requirements set up by commercial banks to be eligible for borrowing.
The analysts have also said that many banks have reported the minus disbursement growth rate, which may make the targeted 8 percent credit growth rate in the whole year 2012 impossible.
The mobilized capital has increased by 11.23 percent so far this year in comparison with the end of 2011. Meanwhile, the outstanding loans have increased by 2.35 percent only.
MBS believes that the purpose of pushing up lending in the fourth quarter of the year would force commercial banks to slash lending interest rates and launch promotion programs.
Saigon Dau tu has quoted its sources as saying that the sharp CPI increase of 2.2 percent in September would make deposits less attractive, which then would drive the cash flow, which has been heading for banks, to other directions.
In the last report, the State Bank of Vietnam showed that the dong interest rates in the interbank market continued the downward tendency in the week from September 24 to September 28.
The two-week interest rate has dropped by one percent, while the 0.1-0.4 percent decreases have been reported for 3-week and overnight loans. Especially, the interest rates for the 9-12 month term deposits have dropped sharply by 3.14 percent.
Le Tham Duong, Business Administration Faculty’s Dean of the HCM City Banking University, has also said that if short term deposit interest rates decrease further, banks would not be able to mobilize capital.
Banks have fallen into a dilemma. If they slash interest rates further, the cash flow to banks would stop. Meanwhile, if they do not lower the interest rates, they would not be able to push up credit, while the capital would get stuck and the national economy would stagnate because of the thirst for capital.
In conclusion, Duong said though the interest rate still can be lowered by another one percent, it is not very likely that this would occur in the time to come.
vietnamnet
