Banks lower deposit rates en mass Several large Vietnamese banks have decided to lower deposit interest rates by 0.1-0.5% for VND accounts for the last months of 2014.   Banks cut interest rates On August 25, the Foreign Trade of Vietnam JSC Bank (Vietcombank) announced that interest rates for short-term deposits of two to nine months will be lowered to 5-5.7%. Annual rates of 6.8% will only apply to 24-month to 60-month term deposits. This is the second time in 2014 that Vietcombank lowered their deposit interest rates. Interest rates for terms of less than six months for deposits at Bank for Investment and Development of Vietnam JSC (BIDV) and Asia Commercial Bank (ACB) were also reduced to less than 6%. The rate for a 12-month term deposit at BIDV is 7.2%, while ACB has slashed it to 6.8%. According to experts, the lower deposit rates show that banks may plan to reduce their lending rates in the near future. The National Financial Supervisory Commission of Vietnam said that the stable inflation rate has created favourable conditions for banks to lower interest rates.  A report from National Financial Supervisory Commission pointed out that deposit rates tend to decrease faster than lending rates. As of July, the average deposit rate decreased by 0.6% compared to rates in December 2013. Meanwhile, the lending rates only reduced by 0.25%. Their report also noted that, "If the inflation remains stable, interest rates may continue to be lowered." On the other hand, the State Bank of Vietnam said that in the first seven months, VND deposits increased by 7.92% compared in late 2013 and the deposits in foreign currencies increased by 1.31%. Liquidity in the banking system has continued to increase. By Nguyen Hien, dtinews.vn