The cap on dong deposit interest rates are
likely to be abolished in the fourth quarter of this year, Nguyen Tri Hieu said
in an interview with the Dau Tu (Investment) newspaper.
However,
rate cap is removed on condition that the government allows distressed bank to
go bankrupt, Hieu said.
Earlier,
Governor Nguyen Van Binh said in a press conference that the monetary authority
will likely remove deposit rate cap “in the next one or two quarters”, provided
that inflation is controlled and macroeconomic conditions become more stable.
At that
time, deposit and lending interest rates will be solely driven by market
forces, the Governor added.
Meanwhile,
the central bank has recently announced to cap lending rates for four
prioritized sectors at 15% per annum; including agriculture, exports, small and
medium enterprises (SMEs) and supporting industries; stepping up efforts to
help local businesses.
Yet,
lending rate cap is just an administrative measure and cannot be maintained for
a long time, Hieu said, emphasizing that local firms may not get access to
cheaper source of funds as they are charged more fees for capital disbursement,
appraisal and consultation, which are not included in the borrowing rates.
Dau Tu
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