SSI: The pressure to increase deposit rates will be at the end of the year
SSI believes that the pressure to increase deposit rates will be towards the end of the year, especially when the ratio of short-term capital for medium and long-term loans will decrease to 34% from October 1.
In the money market report for the week of June 27 - July 1, SSI Securities Analysis Division (SSI Research) said that in the second half of 2022, the State Bank of Vietnam (SBV) will continue to flexibly manage the monetary policy, and under appropriate conditions will expand credit room for commercial banks.
Credit growth in 2022 is estimated at 15-16%, and this growth is nominal growth, which tends to be higher than normal in the context of inflation.
Besides, the pressure to increase deposit interest rates will be towards the end of the year, especially when the ratio of short-term capital for medium and long-term loans will decrease from 37% to 34%, effective from October 1.
Newly updated data from the General Statistics Office shows that, as of June 20, and compared to the end of 2021, credit increased by 8.51% (compared to 5.47% in 2021), M2 increased by 3.3% (compared to 3.48% in 2021) and capital mobilization increased by 3.97% (compared to 3.13% in 2021).
Thus, only in the first 6 months of the year, the amount of new credit injected into the market reached more than VND 888,000 billion, while only VND 434,000 billion was mobilized from the population and economic organizations, and this obviously puts considerable pressure on deposit interest rates in recent years, according to SSI.
In fact, joint stock commercial banks have also adjusted the deposit interest rates with an average increase of 0.3-1 percentage points, mainly at the end of the first quarter and the beginning of the second quarter.
Last week, the SBV continued to use the T-bill issuance channel on the open market, with more flexible maturities. Specifically, this regulatory channel has issued a total of 72,600 billion dong of 7-day bills with interest rate of 0.65 p.a. (down 0.05 percentage points from last week) and 35,000 billion dong of 14-day term with interest rate of 0.9% p.a, while 69,600 billion dong is due.
The term buying channel is still used relatively regularly, with a total issuance volume of VND 1,170 billion for 14-day term and interest rate of 2.5%. In general, during the week, the SBV net withdrew a total of 37,700 billion dong (down from 70,200 billion dong in the previous week).
After two weeks of continuous net withdrawal, interbank interest rates rebounded, with overnight term ending at 0.87% (increased by 0.21 percentage points) and one week at 1.52% (increased by 0.62 percentage points). The VND-USD interest rate gap has narrowed, but still remains at negative level.
- Credit growth has reached 11.5%, the SBV requires banks to actively provide loans for production and business activities
- Governor of State Bank: Credit institutions still have excess liquidity
- There is still room for credit growth of 2.5% in the last 2 months of the year
- ACBS: The State Bank is likely to increase the policy interest rate by 0.5 - 1 percentage points in the last months of the year
- Card payment is booming in Vietnam, expected to reach USD 37.6 billion in 2022
- SSI: Interest rates have returned to the pre-COVID-19 range
- SBV widens spot exchange rate band of USD/VND to 5%
- ACBS forecasts policy interest rates to increase by 0.5-0.75 percentage points from now until the end of the year
- VCBS: VND is likely to depreciate by more than 5% in 2022
- More than 70% of credit institutions expect better business results in the fourth quarter