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Wednesday, July 24, 2024

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Continued rise in interest rates

Putting exchange rate volatility and inflation under control results in money supply growth slowing, thus piling pressure on interest rates. However, economic recovery and credit growth are key factors for deposit interest rates to rise to new levels. Deposit interest rates are expected to hit new highs in Q3 2024 before they stabilize. Deposit rates to rise to new highs According to the State Bank of Vietnam (SBV), as of the end of June 2024, credit in the economy reached nearly VND14.4 quadrillion, up by 6% against the end of last year. Specifically, credit had expanded by 4.45% in the year to June 24, 2024, before it rose by more than 1% in the last week of June. This was a sharp increase in loans compared to a mere 0.26% in Q1 2024. Credit grew faster in the second half of Q2 2024, especially after the Government set a credit growth target of 5-6% in the first half of this year. Capital mobilization by credit institutions fell by 0.57% in Q1 2024 but edged up by 1.5% by June 24. This is the lowest capital mobilization growth in recent years. Thus, the gap between credit growth and capital mobilization growth […]
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