Deposit
rates of many kinds of foreign currencies such as euro and Australian dollar
(EUR, AUD) were recently pushed to new highs by banks, showing that local banks
are thirsty for these foreign currencies, the Dau Tu Chung Khoan (Securities
Investment) newspaper reported.
Typically, Saigon Commercial Bank (SCB)
increased the EUR deposit rate to 4% per year for terms of 12 to 24 months and
the AUD deposit rate to between 3.5 and 3.8% per annum. At Eximbank, the
12-month EUR deposit rate was raised to the highest level of 3% a year and AUD
deposit rate was up to 3.5-3.7% pa for the terms of 1 to 3 months.
At wholly-foreign invested banks namely ANZ,
the AUD interest rates were maintained at around 4.48% per annum for 1-month
term, 4.57% pa for two months, or HSBC raised the dollar at 4% a year.
Le Quang Trung, Deputy General Director of
Vietnam International Bank (VIB) said that the interest rate of AUD in the
international market is very high, approximately 5% pa while Vietnamese
commercial banks raised at only 4% pa. The difference is not strange because so
far domestic banks used to mobilize AUD at below real value because the
currency is not popular. But recently, AUD became one of popular currencies and
its value has appreciated against USD so residents’ AUD reserve is increasing.
An official from HSBC said that AUD interest
rate in the world is high so HSBC pays the high rate for the currency in order
to ensure the benefits of AUD depositors as well as define right value of this
note.
According to a commercial banker, US dollar
deposit rate was limited at the ceiling level of 2% a year on resident’s
deposit and 0.5% pa on deposits of economic institutions whereas the liquidity
of foreign currencies at banks usually is tenser in year end. Therefore, banks
may seek solutions by raising other currencies such as AUD and EUR and then
converting to USD.
Above explanation, an economist said, is
partially reasonable but the more impotence is that in Vietnam, these kinds of
foreign currencies are not popular so they are not taken into banks’ capital
mobilization structure thus, the deposit rates of AUD and EUR used to be low.
“It is normal because in principle, interest
rate of a currency is determined by the market’s demand”, the expert noted,
adding that the sudden increase in deposit rates of AUD and EUR reflected not
only the liquidity of US dollar or a rise in international market but also
relation with VND.
To clarify the assessment, the expert
analyzed, the State Bank of Vietnam (SBV) reported total deposits at credit
institutions in October continued declining month on month, in which the
deposits of Vietnamese dong decreased by 1.29%. “The whole banking system saw a
plunge in VND deposits so the decrease was definitely heavier at some banks.
Hence, banks raced to push up deposit rates of AUD and EUR to handle with
liquidity and balance capital source, he confirmed.
VietBiz24
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