Interbank rates on Vietnamese dong loans eased over the past week with thin trading, while several banks started to raise their deposit rates, reflecting higher demand for cash, bankers said Monday.
Two-week rates slipped to 7.9 percent, the lowest in the past 15 days, from 8.35 percent last Monday. Rates on two-month, six-month and one-year loans fell to the lowest levels in at least 22 days. Overnight rates also dropped to 6.87 percent from 7.13 percent a week earlier.
The interbank market has not picked up because lenders prefer loans from the central bank's open market operations with softer rates, a trader with a Japanese bank said.
But several banks, including Eximbank and Saigon Commercial Bank, raised their interest rates on dong deposits to 11.6-11.65 percent last week from below an industry-imposed cap of 11.5 percent, announcements on their web sites said.
Asia Commercial Bank, the country's fifth largest partly private lender by assets, also offered a floating deposit rate of 11.6 percent.
Interest rates have been kept generally stable in recent weeks thanks to the central bank's regular support via open market operations, bankers said.
Banks now have a moderate demand for cash from sources other than the central bank, a deputy head of a Hanoi-based bank said.
"As they no longer easily get loans from the interbank market as before, they are trying to raise funds from deposits," he said.
The State Bank of Vietnam had said interbank borrowing should not exceed 20 percent of their total deposits, he added.
This may be part of the reason transactions on the interbank market have been thin, another trader in Hanoi said.
The government asked the central bank earlier this month to take further steps to bring deposit rates down to around 10 percent and lending rates to 12 percent.
"I think the market will not have any major change in coming weeks, unless the central bank has more measures to help lower lending rates," said the Hanoi-based bank executive.
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