Hanoi (VNS/VNA) - Deposit interest rate in the second half of this year mightbe adjusted up some 0.3 to 0.5 percentage points, experts forecast.

According to banking expert Nguyen Tri Hieu, savings interest rates in theremaining months of the year will unlikely remain at historic low levels aslast year due to a higher capital demand and inflationary pressure as well as afiercer competition from other investment channels such as real estate andsecurities to attract idle capital flows.

Sharing the same view, Tran Duc Anh, director of the KBSV Securities Company’sMacroeconomics and Market Strategy Division, said interest rates for long termdeposits of large-sized banks would increase by about 0.5 percentage points.

The dong interest rates tradedbetween banks on the interbank market by the end of April declined by 0.5-0.7percentage points per year, but increased again in early May 2022.Specifically, the interbank interest rates in early May 2022 were 0.1-0.4percentage points per year higher than the rates at the end of April on shortterms of less than one month.

Not only small-sized banks, but large-sized banks, which previously always keptdeposit interest rates at very low levels, have recently also adjusted up theirrates as a move to increase the competition in attracting depositors.

Techcombank, for example, last week increased savings rate by 0.3-0.45percentage points per year, lifting the highest rate at the bank to 6.5 percentper year. The surge was the bank’s strongest interest rate adjustment in morethan six months. In previous adjustments, Techcombank’s rate usually onlyincreased slightly by about 0.1-0.2 percentage points.

Analysts from the Saigon Securities Incorporation (SSI)’s research departmentalso said deposit interest rates were under increasing pressure in the wake ofrising inflation and stronger-than-expected credit growth.

Data of the State Bank of Vietnam (SBV) showed total credit supply as of May 20reached more than 11 quadrillion VND, up 7.66 percent compared to that at theend of 2021 and doubling the figure recorded over the same period lastyear.

SBV’s deputy governor Dao Minh Tu said from the beginning of this year, SBV hadguided credit flow towards the production and business sectors as well asprioritised areas, while tightly controlling credit in risky areas.

Particularly, a growth of over 8 percent was seen in credit for sectors facingdifficulties such as tourism and hotels, while a 7.6 percent increase wasrecorded in industrial sectors and supporting industries.

The SBV Deputy Governor said as of the end of April, more than 695 trillion VNDin loans had been given to more than 1.1 million customers.

Thanks to the strong credit growth, many banks have almost reached thecredit quota they were granted at the beginning of the year.

Research by SSI showed an unprecedentedly high credit growth rate was recordedin State-owned banks (up 6.4 percent since the beginning of the year), which isa positive sign of economic recovery.

Therefore, banks could be granted more credit room to facilitate loanexpansion. Meanwhile, banks involved in the restructuring of weak creditinstitutions such as Vietcombank and MB could have the opportunity to grow at avery high level./.