Lowering interest rates is not simply a matter of whether banks agree to cut their listed deposit and lending rates. It is heavily influenced by the internal structure of the banking system itself. When lending grows faster than mobilization, liquidity pressure from the retail market (Market 1) spills over into the interbank market (Market 2) and the open market operations (OMO) channel, making upward pressure on interest rates an inevitable issue. The latest financial statements further reinforce this trend. Vietnam’s banking system is facing a difficult balancing act: the economy needs low interest rates to support businesses, but banks are under persistent liquidity pressure. By the end of the first quarter of 2026, total credit across the banking system had grown by 3.18%, while deposit mobilization increased by only around 0.55%, meaning credit growth was nearly six times faster than deposit growth. This pressure became even more evident as the State Bank of Vietnam (SBV) was forced to continuously inject liquidity through open market operations (OMO). In the first week of April 2026 alone, the SBV injected more than VND286 trillion through OMO and recorded a net injection of nearly VND96 trillion after accounting for maturing instruments. This raises an […]