Vietnam Daily News

SBV to keep deposit interest rate cap at 14pct pa till Dec-end

Written by Dailynews.vn Thursday, 15 December 2011 16:44

At a meeting with commercial banks in last weekend, the State Bank of Vietnam (SBV) said that it would keep the deposit interest rate cap unchanged at 14 percent per annum (p.a.) till the end of December 2011, the local online newspaper VnExpress cited an unnamed bank leader as saying. Accordingly, in the short term, the highest deposit interest rate will not decrease to 12 percent p.a. as rumour. In the next year (2012), the saving interest rate may be lowered but it will be adjusted according to each step. Till the end of December, there will be no changes about the deposit interest rate cap, the central bank confirmed. Previously, the rumour recently emerged in the market that the deposit interest rate cap would be trimmed down to 12 percent p.a. instead of from 14 percent p.a. currently. Some bank leaders also even confirmed the information and said that the new rate cap would be imposed in the last month of this year. However, during the meeting of the central bank and a number of commercial bank last week, this decision has not been passed yet. After the rumours about reducing the deposit interest rate cap appeared in the market, there are many conflicting opinions. Some commercial banks agreed with the central bank's move but many economists fear that lower interest rate cap was still early. In an interview with the press in early days of November, the central bank's Governor, Nguyen Van Binh, said that if the country's inflation rate is at below 1 percent in the last two months of this year, the lending interest rate may be lowered. In the regular press conference in early December, Vu Duc Dam, Chair of the government office also required the central bank to consider reducing further the interest rates based on significantly easing CPI (consumer price index).

Source: www.intellasia.net/news/articles/finance/111350919.shtml