For the fourth time this year the State Bank of Vietnam (SBV) cut its policy interest rates on June 19, with the deposit rate for tenors shorter than six months falling to 4.75% a year from the previous 5%. Since then, many commercial banks have lowered deposit rates of all tenors. Sharp deposit rate cuts The Big Four banks, namely Vietcombank, Agribank, VietinBank and BIDV, were the first trendsetters when they simultaneously lowered the interest rates for deposits of 1 to 2 months by 0.7 percentage point, cut the rate for three-month deposits by 0.5 point, and slashed the rates for tenors longer than six months by 0.8-0.9 point, which were the steepest cuts in the past several years. The highest rate for 12-month tenors at the Big Four now hovers around 6.3%, while deposits of 1 to 2 months now carry an interest rate of only 3.4%, far lower than the cap. The deposit rates posted by the Big Four have now tumbled to levels lower than that last September when banks entered a race to hike interest rates. The Big Four banks strongly influence the market, so their move to lower deposit rates has led other banks to […]