As credit growth is losing steam, most banks have lowered borrowing rates to reduce the capital cost and enable themselves to cut lending rates in the coming time. However, the sharp fall in deposit rates at the Big Four banks hints at a wider policy maneuver for the monetary authority. Collision course The U.S. dollar has strengthened substantially in August, with the reference rate being revised up by VND202 as of August 28 against that in late July, which is the sharpest monthly rise since October 2022 (when the forex market underwent huge pressure that also buoyed up the deposit interest rate). However, market forces are moving inversely this time: while the forex rate is rising steeply, interest rates are falling. Interest rates are falling not only at private joint-stock banks, but also at State-run institutions, although the latter group often referred to as the Big Four has been posting the lowest interest rates on the market. Specifically, Agribank, BIDV, VietinBank and Vietcombank in late August cut the interest rate for one- to two-month savings by 0.3 percentage point to only 3% a year, which is lower than that in September last year when deposit rates bottomed out. Deposits of […]