Lower rates cause savings withdrawals in Vietnam
HANOI: The decrease in bank deposit interest rates has made savings less attractive, as customers have been gradually withdrawing money from banks to find other investment channels.
According to statistics released by the State Bank of Vietnam (SBV) last week, deposits from economic organisations have decreased after five consecutive months of increases, causing bank lending to decline.
Specifically, deposits from economic organisations have decreased by 3.04% compared with the end of last year.
The decrease in deposits comes as savings interest rates have been declining continuously since after the Lunar New Year holiday.
On Feb 25, the SBV held an urgent meeting with commercial banks and instructed them to cut deposit interest rates.
The meeting came after Prime Minister Pham Minh Chinh issued a directive for the SBV to inspect commercial banks that increased their deposit interest rates and strictly handle violations.
Immediately after the meeting, banks lowered their deposit interest rates.
From Feb 25 to April 14, 27 banks adjusted their deposit interest rates down, with a reduction of between 0.1 and 1.05 percentage points per year, depending on the term.
Currently, only a few banks, including GPBank, Vikki Bank and HDBank, maintain deposit interest rates above 6% per year.
An investor who declined to be named said that the current savings interest rate was around 6% per year, while the price of gold bars and gold rings was anchored at historical peaks.
Since the beginning of this year, the price of gold bars had increased by more than 22 million dong per tael (37.5g), equivalent to a net increase of more than 26%.
Many people had therefore withdrawn their savings to buy gold. — Viet Nam News/ANN
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
11 hours ago
- The Star
Experts: End monopoly in the gold market
An employee prepares a gold dragon statue inside a jewelry shop during Lunar New Year holidays in Hanoi, Vietnam, on Monday, Feb. 19, 2024. Photographer Linh Pham/Bloomberg HANOI: It is time to fundamentally change the gold market structure through eliminating monopoly and building a gold trading exchange to effectively manage the market, say experts. Many of them believe that to stabilise the domestic gold market, it is necessary to eliminate the monopoly of gold bars, as directed recently by the general secretary To Lam. Only when more businesses are allowed to participate in the production and import of gold bars legally and transparently, can the market achieve a state of healthy competition, bringing domestic gold prices closer to world prices. On the goal of narrowing the gap between domestic and world gold prices, vice-president of the Vietnam Gold Business Association Nguyen The Hung said this depends entirely on actual supply and demand in the market. In principle, when demand exceeds supply, prices will increase, and gold is no exception. If the local gold supply is supplemented, domestic gold prices will decrease. According to Hung, a major bottleneck are the activities of gold jewellery manufacturing enterprises. Although Decree 24/2012 allows the import of raw gold, gold manufacturing and trading enterprises have not been granted import quotas for more than 10 years. As a result, they have to buy gold on the market unofficially at high prices with unknown origin. It means the ultimate risk will be pushed to consumers because they will have to buy gold at prices much higher than the world price. Another bottleneck of the gold market is the 1% export tax currently applied to jewellery. Vietnamese businesses import raw gold at global prices but are taxed when exporting, making the cost even higher. Therefore, they cannot compete against their foreign rivals. They also have to bear a series of additional costs such as labour, machinery and depreciation. Hùng said if the export tax is removed and the supply of raw gold is ensured, it will create a strong driver for jewellery gold exports, attracting foreign currency revenues into the country. According to deputy Tran Anh Tuan of the National Assembly delegation of Ho Chi Minh City, if the government shifts to market-based management and create conditions for qualified enterprises to participate in the production, trading and distribution of gold as a normal commodity, the gap between domestic and global gold prices will be narrowed. 'It is necessary to open the door to qualified enterprises. If they have a licence, they should be allowed to import according to their actual capacity.' — Vietnam News/ANN
The Star
2 days ago
- The Star
Vietnam celebrates groundbreaking of US$300mil tech hub in Hanoi
Vietnam PM Pham Minh Chinh (centre) and delegates at the groundbreaking ceremony -- Photo: VNA HANOI (Vietnam News/ANN): Prime Minister Pham Minh Chinh on June 1 attended the groundbreaking ceremony for the Hanoi CMC Creative Space (CCS Hanoi), a US$300 million technology complex hailed as a key part of Vietnam's push for innovation and digital transformation. The project, led by private firm CMC Technology & Solution, located on an 11,000 sq.m site in Hanoi, will feature 23 floors above ground and three basements, with a total floor space exceeding 90,000 sq.m. Following the success of CMC's first creative space in Ho Chi Minh City - CCS Tan Thuan, this second facility will serve as an open artificial intelligence centre, dubbed It aims to house a comprehensive tech ecosystem, including a state-of-the-art data centre, research and development labs, training facilities, and a startup incubation zone, employing over 5,000 engineers. At the heart of the complex is the CMC Data Centre, designed to deploy cutting-edge technologies in artificial intelligence, cloud computing, cybersecurity, big data, and next-generation networks. The ecosystem will also integrate 25 core technologies developed by CMC. In his address, PM Chinh praised the project as a testament to the private sector's role in advancing Vietnam's technological ambitions, aligning with the Party's policy of making breakthroughs in sci-tech, innovation, and digital transformation. With Vietnam targeting at least 8% economic growth in 2025 and double-digit expansion thereafter, he called for national unity to drive prosperity, safeguard its independence, sovereignty, and territorial integrity. He urged CMC to lead in sci-tech, innovation and digital transformation, inspiring other businesses, educational establishments, and research centres, particularly young people, to contribute to Vietnam's rapid and sustainable development. He expressed his hope that CMC would grow into a major multinational corporation integrated into global value chains while prioritising social welfare and equitable access to technology, especially for remote and vulnerable communities. The Government will always accompany companies, including CMC, and request ministries, agencies, and Hanoi authorities to further support them by promptly removing any obstacles to their growth, he concluded. - Vietnam News/ANN
The Star
2 days ago
- The Star
Vietnam proposes US$2bil north-eastern casino resort: VnExpress
HANOI: Vietnam's Ministry of Finance is proposing an investment policy for a 51.5 trillion dong (US$1.98 billion) luxury casino complex in the north-eastern province of Quang Ninh, home to Unesco World Heritage Site Ha Long Bay, VnExpress International news website reported. The proposal was submitted to Prime Minister Pham Minh Chinh, it said, citing information from the ministry. The project would be built in Van Don district of Van Yen commune, and the ministry proposes allowing Vietnamese citizens to take part in casino gaming at the resort under a pilot programme, the report said. Last year, the government renewed a decree allowing some citizens to gamble at select casinos on a trial basis. Of the total investment, 7.7 trillion dong would be supplied by an investor, with the remainder financed through bank loans, according to the report, citing information from documents submitted to the State Appraisal Council. The ministry recommended the Quang Ninh provincial People's Committee be authorised to select an investor, according to VnExpress. The complex would be built in three phases, with the first completed in about 2027 with an estimated investment of 25.1 trillion dong, it said. Quang Ninh province had approved Sun Group as the sole investor in a Van Don casino, according to a 2017 statement on the provincial government's website. - Bloomberg
