Hanoi (VNS/VNA) - Though some banks increased their deposit interestrates early this month, it is not a common trend and the rate currently isstill at the lowest level it has been in many years.

With the liquidity of the banking system abundant and interest rates on theinterbank market still at a low level, some banks unexpectedly increased theirrates at the beginning of March.

Techcombank has applied higher savings interest rates of 0.5-0.6 percentagepoints for many terms since March 1. Specifically, the rates for six-month and12-month deposits rose to 4.4-4.7 percent and 5.1-5.4 percent per year,respectively.

VPBank also listed new deposit rates for individual customers from March 2,with rises from 0.2 percentage points for terms less than six months.

At ACB, the two- and three-month deposit rates were also increased by 0.1percentage point.

Despite these movies, in general, the deposit interest rates at most otherbanks haven’t changed much compared to last month and remain at a low level.

The rates were kept unchanged from the previous month among State-ownedcommercial banks including Vietcombank, Vietinbank, BIDV and Agribank, and inthe group of joint-stock commercial banks such as LienVietPostBank, SeABank andTPBank.

Several other banks even decreased their rates. At BacABank, for example, therates for one-month to five-month deposits fell by 0.2 percentage points to 3.6percent per year while six-month to 12-month deposits also saw declining ratesof 0.3 percentage points.

SCB also reduced the rate by 0.5 percentage points for 12-month deposits to 6.8percent per year.

According to experts, there is not much room to further reduce savings interestrates as banks must ensure real positive interest rates compared to inflationto attract depositors.

They explained while the inflation rate has been increasing since the firstmonths of this year, demand for credit is also forecast to surge rapidly thisyear when the economy recovers. Interest rates will likely increase as aresult.

KB Vietnam Securities Company said the interbank interest rate and Governmentbond yields are hitting the bottom while the deposit interest rate is alsodropping to the lowest level in the past 15 years. The company forecast theinterest rate level is likely to bottom out in the first half of 2021 andincrease slightly again in the second half of 2021.

Vo Tri Thanh, a member of the National Financial and Monetary Policy AdvisoryCouncil, said it was very difficult to further lower interest rates becauseeconomic recovery will lead to an increase in demand for credit.

The management of monetary policy this year must be very flexible, Thanh noted,adding if the monetary policy was too tight, it could hamper the economicrecovery; but vice versa, if the policy is too loose, the country would facefinancial risks and high inflation.

Financial risks have been seen in recent months when many investors spent onsecurities and real estate instead of depositing at banks due to low interestrates, Thanh said, adding it was best to maintain the interest rate level.

Though there were no signs of a bubble currently, Thanh warned it could occurif interest rates were cut further./.