Overnight interest rates hit four-month record low

Overnight interest rates hit four-month record low

Despite the decline there will be still pressure in the future due to the high gap between credit growth and deposit growth, according to analysts.

Though the group of large banks still maintained compliance with the loan-to-deposit ratio capped by the SBV, the current ratio is very close to the maximum threshold, narrowing the room for adjustment for banks. — VNA/VNS Photo

Overnight interest rates of đồng loans in the interbank market have fallen sharply to their lowest level in nearly four months, staying at 3.52 per cent per year at the end of last week.

The cooling of interbank interest rates, along with the State Bank of Vietnam (SBV)’s five consecutive net withdrawals of more than VNĐ54.5 trillion (US$2.06 billion) from the OMO market last week, indicates that liquidity pressure in the banking system has eased.

Despite the decline, according to analysts, there will still be pressure in the future due to the high gap between credit growth and deposit growth.

According to the Mirae Asset Securities Company, financial statements of banks at the end of Q1 2026 showed though the group of large banks still maintained compliance with the loan-to-deposit (LDR) ratio capped by the SBV, the current ratio is very close to the maximum threshold, narrowing the room for adjustment for banks.

Besides, though large banks have managed to maintain a suitable ratio of short-term deposits to medium and long-term loans, their room for manoeuver is increasingly limited. Conversely, the demand for long-term loans from the credit system for projects, especially mega ones, is relatively large and urgent.

In addition, many large central banks in the world are also likely to maintain a tightening orientation in the near future, thereby putting pressure on domestic interest rates to remain high.

Therefore, although the SBV is actively aiming to lower interest rates, the general trend suggests that interest rates will remain stable rather than significantly decrease. 

Bizhub