Despite good liquidity in the banking system, the peculiarities in Việt Nam’s monetary policy management has prevented the decline of interest rates on deposits. Therefore, according to the commission, maintaining low interest rates in the inter-bank market triggers instability, and it will be a barrier to the commercial banks unwilling to lower interest rates (mainly long-term rates). Therefore, the latter must increase interest rates to higher levels than the average rates to be able to attract depositors. This year, the central bank has targeted keeping the interest rate stable, but some commercial banks inched up deposit interest rates in the first month of the year. It affirmed that interest rates were stable in the first month of 2017 and would remain steady for the entire year.

Source: Viet Nam News February 21, 2017 02:48 UTC