Credit growth in the first months of this year slowed significantly due to high interest rates and firms’ poor health, raising concerns about rising bad debts.

The State Bank of Vietnam (SBV) has recently granted the first credit growth quotas in 2023 to a number of banks, with a majority of them receiving lower rates than last year.

The race of interest rate hikes among commercial banks is showing signs of cooling down as many banks have adjusted down the rate by several percentage points per year after the Lunar New Year (Tet) holiday and have set stricter conditions for customers to enjoy the high rates.

VOV.VN - Ho Chi Minh City received approximately US$6.8 billion in remittances last year, marking only a slight decrease compared to 2021 and accounting for 48% of foreign currency deposits at its credit institutions.

Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong has directed banks to continually reduce input costs with an aim to cut loan interest rates.

The liquidity of the whole banking system has remained good, Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong has said.

Increasing deposit interest rates is in line with the general trend, ensuring liquidity safety and capital mobilisation for the economy, Deputy Governor of the State Bank of Vietnam (SBV) Pham Thanh Ha has said.

Deposits at all banks, including the Saigon Commercial Bank (SCB), are guaranteed by the State in all cases, Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong affirmed on October 10 when talking to the media regarding recent issues related to the SCB.

The Vietnamese central bank’s move to lift short-term deposit rate caps is likely to raise the average cost of funds – both deposit and interbank rates – for Vietnamese commercial banks.

Experts forecast that bank net interest margins (NIM) will decline as inflation rises next month.