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Ho Chi Minh City
Friday, June 21, 2024

Hidden risks for brisk growth

By V. Dung

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Though half a year has has passed, the real estate market has barely improved despite multiple measures being taken to back it. More time needed Despite various supportive measures, the real estate market in Vietnam showed no significant improvement in the first half of 2023. Interest rates have been a key concern, with lending rates remaining high despite the State Bank of Vietnam’s (SBV) efforts to lower them. The SBV has made four key interest rate cuts since the beginning of the year, indicating its orientation toward lowering deposit interest rates among commercial banks. This, in turn, is expected to drive lending rates down, support businesses, and stimulate economic growth. Despite the central bank’s moves, there is a lack of interconnection between the money market and the interbank market. As a result, lending rates remain stubbornly high. A survey conducted by The Saigon Times reveals that current interest rates for home loans fluctuate between 11% and 15%, while deposit interest rates range from 7% to 9%. This disparity discourages the inflow of short-term savings into the sluggish real estate market. Looking back at the interest rate movements during the 2011-2013 real estate crisis, Nguyen Quoc Anh, deputy general director of […]
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