Rising interest rates create double pressure.

Deposit interest rates continue to trend upwards, with rates of 8-8.5% per year no longer uncommon in the market. These high interest rates create double pressure not only for borrowers but also for banks.

Deposit and lending interest rates have both increased.

Vietcombank, VietinBank, and BIDV have simultaneously adjusted and increased deposit interest rates across key maturities, bringing the overall VND deposit interest rate to a new high.

Rising interest rates are a concern for both businesses and banks. (Photo: T. Hai)

Three state-owned commercial banks simultaneously increased deposit interest rates amidst a fierce competition to raise deposit rates immediately after the Lunar New Year. Among the banks that announced interest rate increases since the beginning of March are many large banks such as MB, Techcombank, Sacombank,SHB , etc. Most banks updated their deposit interest rate schedules with increases of 1-2% compared to the end of last year. Currently, interest rates of 8-8.5% per year are no longer uncommon in the market.

Raising deposit interest rates is aimed at retaining customers in a context where credit outstanding has been increasing faster than deposits for a long time. In addition, other investment channels such as gold, silver, and stocks have become more attractive recently, and the rising exchange rate has put significant pressure on savings. Raising interest rates aims to improve the capital structure, ensure liquidity safety ratios, and prepare room for lending activities in the following quarters.

Rising deposit interest rates have led to increased lending interest rates. Currently, interest rates for real estate investment loans, home purchases, etc., at many banks have reached 12-14% per year, and in some cases, floating interest rates have even reached 15% per year after the preferential period.

Not only in the real estate sector, Ms. NTT, a credit officer at a joint-stock bank in Hanoi, said: “After the Lunar New Year, lending interest rates increased sharply. Currently, interest rates for production and business loans with a 6-month term have risen to 8.2%/year, and 8%/year for 3-month terms. Meanwhile, interest rates for consumer loans, land purchases, house purchases… have risen to 13-14%/year, fixed for the first two years.”

“Three months ago, I borrowed money from the bank to invest in my business at an interest rate of 6% per year, and now the interest rate has increased to 8% per year, resulting in nearly 10 million VND in interest charges. The market is sluggish after Tet, sales are weak, and with high interest rates, business owners like me are facing difficulties,” worried Ms. Nguyen Thi Hoa, a business owner in Dong Da ward.

The problem for monetary policy

Rising interest rates not only worry borrowers about access to capital and hinder business growth, but also cause banks to fear increased bad debt risks and shrinking net interest margins (NIM) due to rising funding costs. This concern is exacerbated by banks being forced to raise interest rates to compete for capital, leading to greater debt repayment pressure on businesses, especially in the real estate sector.

According to a bank executive, interest rate pressure remains. Besides the cost of capital, volatility in international financial markets can also affect monetary policy management and domestic interest rate levels.

However, experts believe that the current high interest rates are temporary. The medium-term picture is not entirely bleak, and interest rates may gradually be eased from the second quarter of 2026 onwards once inflation control targets are met.

At the recent dialogue "Vietnam's Economic Outlook and Investment Strategy for 2026," Mr. Suan Teck Kin, Director of Global Market and Economic Research at UOB Bank (Singapore), predicted that the State Bank of Vietnam will likely continue to maintain the refinancing interest rate at 4.5% in 2026.

“Our baseline scenario assumes Brent crude oil prices could rise to around $90 per barrel in Q2 2026 before falling to around $80 per barrel by the end of 2026. In this scenario, the impact on inflation and growth in Vietnam is assessed as moderate,” said Suan Teck Kin.

According to Dr. Le Xuan Nghia, the current slight increase in lending interest rates does not reflect a reversal in monetary policy. Managing interest rates is always a balancing act between macroeconomic stability and supporting the economy. With inflation still under control and growth needing support, monetary policy is likely to continue in a cautious and flexible direction, avoiding shocks that could harm the economy.

Instead of raising the policy interest rate, the State Bank of Vietnam tends to regulate liquidity flexibly through open market operations, buying and selling government bonds with maturities to inject or withdraw short-term money. This helps control liquidity without causing interest rate shocks.

Mr. Nghia believes that, given the rising cost of capital and the uncertain international economic environment, lending interest rates in Vietnam are likely to increase only slightly and will differentiate between credit groups. The State Bank of Vietnam is still requiring strict control over credit to "potentially risky" sectors, directing capital flows towards production and business and priority growth drivers. Large banks with cheap capital and large customer bases can maintain lower interest rates. Meanwhile, smaller banks may have to apply higher interest rates to compensate for capital costs and credit risk.

Source: https://hanoimoi.vn/lai-suat-tang-ap-luc-kep-741012.html