Newly released data from the State Bank of Vietnam shows that deposits from the public continue to flow into credit institutions. Specifically, as of the end of April 2023, the amount of deposits from the public at credit institutions reached VND 6,332 trillion, equivalent to an increase of 7.96% compared to the end of 2022 (an increase of more than VND 467,000 billion).

April also marked the fourth consecutive month of increased household deposits in banks. Compared to March, household deposits increased by 52,000 billion VND in April.

Money from the public continues to flow into credit institutions. Photo: vtv.vn

Notably, the surge in household deposits at banks occurred amidst the State Bank of Vietnam's continuous reduction of policy interest rates, which enabled commercial banks to lower deposit rates.

Recently, at the regular government press conference in June 2023, Deputy Governor of the State Bank of Vietnam , Dao Minh Tu, stated that since the beginning of 2023, the State Bank has lowered the policy interest rate four times, by 0.5% to 2%. As of the end of June, the average deposit interest rate had decreased by 0.7% to 0.8%, and lending interest rates by 1% to 1.2%. State-owned commercial banks have taken the lead in reducing interest rates, with many announcing very significant reductions.

Conversely, deposits from economic organizations at banks showed a sharp decline. In the first two months of the year, deposits from this group decreased by 338,000 billion VND, then increased again by 48,000 billion VND in March, but could not maintain this upward trend.

Specifically, deposits from economic organizations decreased by VND 8,833 billion in April, falling to VND 5,654 trillion, a 5.02% decrease compared to the end of 2022. The difficulties in production and business over the past period are considered the main reason for this downward trend. Businesses have had to withdraw deposits from banks to address these difficulties.

According to data from the General Statistics Office, an average of 16,700 businesses closed down each month during the first six months of 2023. Specifically, in the first six months of 2023, the number of businesses temporarily suspending operations was 60,200 (an increase of 18.2% compared to the same period last year); 31,000 businesses ceased operations pending dissolution procedures (an increase of 28.9%); and 8,800 businesses completed dissolution procedures (an increase of 2.8%).

According to the Business Registration Department, working capital is considered one of the biggest challenges that businesses are currently facing.

Statistics show that the registered capital of newly established businesses in the first six months of 2023 decreased by 19.8% compared to the same period in 2022; and was also lower than the average for the first six months of the 2018-2022 period. Furthermore, the average registered capital per business in the first six months of 2023 reached only 9.3 billion VND - the lowest level for the first six months of the year since 2017.

According to VTV