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"Not except to increase interest rates next time"

Tuesday - 28/08/2018 04:24
"I do not think that the lending rates will increase, at this point it will be stable, however, without excluding it increases in the coming time," said Dr. Nguyen Tri Hieu.
The number of banks raising interest rates was dominant in the system, the highest increase of up to 8.6% per annum for the term of 24 months or more. In your opinion, what causes this situation?

Interest rates increased mainly in the medium and long term, as several months as required by Circular 06, from January 1, 2019, banks are allowed to use 40% of short-term loans for medium and long term instead of 45%, so more medium and long term funding is needed. In the short term interest rate increase is the single state of some banks need capital.

In addition, the credit room phenomenon in some banks has run out, the State Bank of Vietnam does not approve the credit room, the demand for capital is reduced, so the short term part of the credit room is used up. There is no need to raise interest rates for short terms.

Dear Sir, the savings interest rates increases, Has the lending interest rates increased by?

I do not think interest rates will increase, at this point interest rates are maintained stablely. However, without excluding it increases in the coming time due to raising capital, increasing long term interest rates and many medium and long term loans.

The savings interest rate increase is the short-term or inevitable trend, dear Sir?

The issue of raising interest rates has many reasons and may not be an immediate move but from now until the end of the year will continue in the medium and long term.

In addition, depending on the exchange rate issue, there is a lot of pressure to push the exchange rate up, with the exchange rate increase like this may pressure on the interest rate, especially interest rates must remain relatively high to limit pressure on the exchange rate. In the coming time, the Fed may raise the interest rate, the US-China trade war will create pressure and maintain the interest rate difference between USD and VND. If the exchange rate increases, people can withdraw VND and buy USD.

Directive 04 of the State Bank of Vietnam aims to tighten control over credit growth this year with the aim of supporting inflation control by stricter targeting for credit growth in 2018. In his opinion, affect the profitability of banks?

Of course, banks will find it difficult to achieve profit targets, so the SBV may find it difficult to open the bank room so that banks may have to adjust their earnings targets as credit facilities blocked by the State Bank.

In addition to credit growth, if you want to maintain profit targets, you must be competitive in the lending market for other credit institutions, borrowing Government bonds, but in the market Second has lower levels of profit. In addition, it may have to boost non-interest income sources and cut operating expenses. Despite some efforts, it may be difficult to offset the decline in the profitability of non-credit room loans.
Thank you Sir!

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