(NLDO) – The State Bank's operating interest rate has not changed because inflation and risk factors are still under control.
This is the opinion of Mr. Suan Teck Kin, Head of Global Market and Economic Research, UOB Bank (Singapore), at the sharing session on Vietnam's economic prospects in 2025 organized by UOB this afternoon, March 4.
According to Mr. Suan Teck Kin, the State Bank's operating interest rate will not change in the coming time, because inflation and other risk factors are still within the allowable range for the banking industry to expand credit packages, supporting economic growth.
Currently, with the upward pressure of the USD/VND exchange rate and the US Federal Reserve (FED) not rushing to cut interest rates in the first half of 2025, it is difficult for the State Bank to reduce the operating interest rate. On the contrary, inflation is under control but still at a high level for the management agency to be able to cut the operating interest rate. Therefore, the State Bank's solution at this time is to flexibly manage interest rates, balancing with the exchange rate to promote growth.
Interest rates on deposits and loans remain stable.
Mr. Dinh Duc Quang, Director of Currency Trading, UOB Vietnam Bank, analyzed that in recent months, the market has recorded some information about commercial banks sharply increasing deposit interest rates. However, this is only a local development at some banks. Many of the largest commercial banks continue to apply 12-month term deposit interest rates of around 4.8-5%/year; the group of joint stock banks has a 12-month interest rate of around 5.5%, stable in recent months. This is a suitable interest rate in the context of VND depreciating by about 5% compared to USD in 2024.
"With the target of higher GDP growth, about 8% in 2025, along with solutions to accelerate public investment disbursement, expand export markets, attract FDI focusing on technology, the management agency also mentioned the solution of strong credit expansion. This may put pressure on a slight increase in VND interest rates in 2025, but on the positive side, if USD interest rates on the international market decrease, the world economy grows better... it will balance the above pressure. Vietnam's economy has the opportunity to attract foreign investment in the medium and long term very positively, which is a solid foundation for stabilizing interest rates and exchange rates" - Mr. Dinh Duc Quang said.
Previously, in its recently released macroeconomic report on Vietnam, Standard Chartered Bank forecast that inflation would increase in the coming time, with an increase of 3.8% in February 2025, from 3.6% in January 2025. This is the 7th consecutive month that inflation has remained below 4% over the same period.
The Vietnamese government has adjusted its 2025 GDP growth target to at least 8%, compared to 6.5-7%, with inflation expectations at 4.5-5% to create room for flexible monetary policy.
"Stronger growth prospects could help keep interest rates low in the short term. The State Bank is expected to raise interest rates by another 0.5 percentage points in the second quarter of 2025 to cope with rising inflation," said a Standard Chartered expert.
Regarding interest rate management, Deputy Governor of the State Bank Dao Minh Tu said that over the past two years, the State Bank has always made efforts in management to keep interest rates stable.
Recently, the State Bank has sent a document requesting commercial banks to stabilize deposit interest rates and reduce lending interest rates. This is a move to implement the direction of the Government and the Prime Minister to promote economic growth to reach 8% or more in 2025.
Source: https://nld.com.vn/chuyen-gia-nuoc-ngoai-du-bao-moi-nhat-ve-lai-suat-vnd-196250304174912461.htm
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