'Fever' on interbank market

VNStockNews.com - Facing hardships on mobilising capital in the official market, commercial banks are now switching to capital mobilisation channel in the interbank market, causing trading turnover as well as interest rate in this market increasing strongly during last week.

Following the strong increasing tendency of previous week, according to calculation of State Bank of Vietnam (SBV), during last week, the average interest rate in the interbank market continued rapidly increasing up to over 10 percent per year. With the amplitude of terms at 0.24-1.08 percent per year, the six month term witnessed the strongest increase and the highest lending rate of dong reached 12 percent/year.

Notably, the overnight average interest rate was also up to 10.71 percent/year, increasing by 0.66 percent/year against previous week meanwhile the average interest rate of remaining terms ranged from 11.3 percent/year and higher. Particularly, the average interest rate of one week term also jumped to 11.66 percent per year, marking the highest increase during last week.

The trading turnover of dong during last week increased only 8.507 trillion dong to 120.35 trillion dong (equalling to 24.07 trillion dong per day) whereas the rise of previous week reached up to 29.077 trillion dong. But this figure still showed that capital demand of commercial banks remained high. When most terms have the interest rate of over 11.3 percent/year, it's easy to see that this capital source in the interbank market is to meet consumer loans which have the lending rate around 15-17 percent/year.

With the "ceiling" deposit rate of dong at 10.49 percent per year according to SBV's regulation, the dong deposit rate benchmark of series of commercial banks witnessed unprecedented changes with the unique deposit rate for all terms. Many banks such as Oceanbank, SCB, VietABank and GP Bank are applying the unique deposit rate at 10.49 percent/year for all terms and deposits.

Meanwhile, the deposit rate for 1-3 week term is commonly at 10.3-10.45 percent/year, even up to 10.47-10.48 percent/year.

In addition, commercial joint stock banks have been strengthening offering more cash bonus programmes and promotion programmes to attract depositors.

Along with increasing the deposit rate for all terms to 10.49 percent/year plus a bonus deposit rate of 0.02-0.2 percent/year, VietABank is offering a bonus deposit rate of 0.005 percent/year for deposit worth from one billion dong and higher. HDBank has recently also announced to double bonus deposit rate for depositors from now to January 4, 2010.

Starting from December 24, SCB also committed to offer cash at the ratio of 0.2 percent/year for deposits with terms of from two months. The bank is also launching three promotion programmes for depositors before January 1, 2010 with the highest bonus deposit rate of 0.25 percent/year and cash bonus at 0.24 percent/year.

According to specialists, the central bank needs to intervene strongly with refinancing for commercial banks with interest rate 8 percent per year to reduce the heat in the interbank market.