Banks cut deposit rates as CPI declines

TUOITRENEWS  

Wednesday saw many banks simultaneously slash deposit interest rates, while the Ho Chi Minh City Statistics Office announced a slight decrease in the city’s consumer price index.

The interest rate for deposits of a term between one and three months at Vietcombank was lowered from the rate cap of 8 percent a year to 7.5 percent a year.

The country’s third-largest partly-private lender also dramatically cut the rate for deposits of a term of over 12 months, dropping it from 10.5 percent to 9.5 percent.

ACB meanwhile imposed a 0.2 percentage point cut on rates for one- to six-month terms, while offering a 7.6 percent a year rate for 9-month term deposits.

Some industry insiders, however, believe the unexpected interest rate cuts were a sign of banks embracing another order to slash rates by the State Bank of Vietnam.

The banking system is likely to see another interest rate adjustment, as the government has recently asked the central bank to continue lowering deposit interest rate in order to reduce lending rates. The deposit interest rate was capped at 8 percent last year under the government’s bid to assist businesses with lower lending rates.

CPI declines

Other insiders said the rate cuts came since banks have anticipated the development of the CPI in March, which saw a slight decrease of 0.29 percent, according to the statistics office. The city’s CPI rose 1.15 percent in the first quarter of this year.

Six out of 11 commodity baskets posted slight decreases, the office said.

The deepest decrease -- 0.62 percent -- was recorded in the commodities and services basket, followed by food and restaurant services (0.6 percent), and culture-entertainment-tourism services (0.47 percent).

Beverages and cigarettes dropped by 0.35 percent, while transport saw a 0.34 percent decline, and garments and textiles-headwear-footwear, 0.08 percent.

In the increase group, housing-electricity-water-fuel prices, and construction material prices respectively rose by 0.38 percent and 0.07 percent.

However, local consumers said they have not seen any price cuts on the products on sale in citywide markets.

“Prices of pork, vegetables, and other essentials remain almost unchanged,” said Thanh Xuan, a market-goer from Binh Thanh District.

Meanwhile, economic expert Ngo Tri Long said the lower CPI does not mean good news for the economy.

“In fact, it proves that the economy remains in crisis with poor consumption and manufacturers in trouble,” he said.