Vietnamese interbank interest rates have eased from recent highs but remain elevated, signaling persistent liquidity pressures and potential knock-on effects for lending and deposit costs. The overnight interbank rate, a key indicator of short-term funding between banks, stood at approximately 8.5% on , a significant decline from the 17-17.5% seen a week prior, according to data from the Vietnam Interbank Market Research Association (VIRA).
Interbank rates reflect the cost at which banks borrow from each other to meet short-term liquidity needs and mandatory reserve requirements set by the State Bank of Vietnam (SBV). Elevated rates generally indicate tighter liquidity and can translate into higher funding costs across the board.
A senior executive at a major commercial bank cautioned that liquidity could remain a significant challenge for credit institutions in , warning that increased funding pressures could complicate credit expansion and profitability in what is expected to be a difficult year for the sector.
However, analysts suggest the recent surge is largely technical and temporary, rather than a sign of systemic stress. Nguyen Hoan Nien of Shinhan Securities indicated that the rate increase is likely transient but could keep interbank rates at a higher level, at least through the first quarter of the year.
SSI Securities characterized the recent volatility as “technical and circumstantial,” attributing it to seasonal budgetary flows and market dynamics rather than underlying structural weaknesses. The SBV has responded by injecting liquidity through open market operations and currency swaps, mitigating the sharpest increases in overnight rates.
Deposit rates, which had remained very low since early , have been trending upwards, reaching approximately 7 to 8% annually, with some banks offering as high as 8.5% to attract funds. This reflects the banks’ need to bolster deposit bases to meet lending demands and regulatory requirements.
Analysts believe that persistent pressure on interbank funding could continue to influence commercial lending rates, particularly as credit growth has outpaced deposit mobilization since late . The one-week and one-month interbank rates are currently trading between 9% and 9.2%, significantly higher than levels anticipated at the end of .
Market observers note that Vietnam’s interest rate environment has become more sensitive since late , amid stronger credit demand, seasonal liquidity fluctuations, and increased competition for deposits. The overnight lending rate in the interbank market fell to 8.5% on , half the 17% rate seen on .
Despite the volatility, most analysts emphasize that this does not signal a weakening of macroeconomic fundamentals. “Liquidity tensions are present, but cyclical,” analysts at SSI noted in a market report, adding that the recent surge should be viewed as a technical adjustment rather than a sign of economic deterioration.
Proactive liquidity support from the SBV is expected to stabilize rates in the short term, even as interbank costs remain a key indicator of lending and deposit trends throughout . The SBV injected a net amount of VND 6,656.62 billion into the market on , following injections of over VND 136,000 billion through open market operations earlier in the week.
Vietnam’s economic outlook remains positive, with GDP growth reaching 8.46% in the fourth quarter of , and 8.02% for the year as a whole. Forecasts for GDP growth range from 8.5% to 8.7%, fueled by accelerated public investment and continued economic reforms. However, managing liquidity and maintaining financial stability will be crucial to sustaining this momentum.