Hanoi (VNS/VNA) - Many banks have cut deposit interest rates after theState Bank of Vietnam (SBV) lowered the ceiling levels of interest rates fromOctober 1.

AtKienlongbank, rates are now only 3.55 percent per year on one-month deposits,3.75 percent on two-month terms and 3.95 percent on three- to five-monthdeposits, down by 0.6 percentage points.

AtNam A Bank, the annual rate for deposits of 14 months is now 7 percent, down 10basis points against the previous rate.

Similarly,OCB has lowered its deposit rates for tenors of one month to 3.75 percent, ofthree months to 3.9 percent and of six months to 5.8 percent, down 0.2percentage points.

Customersmaking deposits worth less than 500 billion VND (21.5 million USD) for tenorsof 12 months at OCB will receive an annual rate of 6.3 percent. The rate of the12-month tenor for deposits worth 500 billion VND or more is 8.1 percent.

TheSBV reduced a series of key policy rates, with the annual refinancing ratereduced from 4.5 percent to 4 percent and the rediscount rate cut from 3 percentto 2.5 percent.

Theovernight lending rate in the interbank market was also reduced to 5 percentfrom 5.5 percent, while the interest rates for buying valuable papers throughthe open market were lowered from 3 percent to 2.5 percent.

Moreover,the highest rates for non-term deposits and savings of less than one month arenow 0.2 percent per year, while the maximum annual deposit rate for savings ofone month to less than six months was cut from 4.5 percent to 4 percent.

Apartfrom this, the highest rates for deposits of one month to less than six monthsat people’s credit funds and micro credit institutions dropped to 4.5 percentper year.

Accordingto a report released recently, Saigon Securities Incorporation (SSI) said bankswere experiencing abundant liquidity and the Vietnamese dong in the system was excessive due tothe weak credit demand.

SSIcited data from the General Statistical Office (GSO) showing that as ofSeptember 22, the mobilised capital in the banking system increased by 7.7 percent,while credit growth was only 5.12 percent compared to the beginning of theyear, much lower than the 8.79 percent recorded in the same period last year.

Accordingto SSI’s statistics, the VND depositrates have sharply fallen from May until now by a total of 1.2 - 2.5 percentagepoints across all terms. The rates for terms from one to less than six monthsat some banks are particularly low at 2.2 - 2.5 percent per annum.

SSIsaid the main factor affecting deposit rates in the near future was stillcredit demand, and it maintained its forecast that the deposit rates would fallfurther by 0.1 - 0.3 percentage point in the fourth quarter of 2020./.