Bac A Commercial Joint Stock Bank (Bac A Bank) announced a reduction in deposit interest rates from today (August 14) for all deposit terms.

According to the interest rate schedule for deposits under 1 billion VND with interest paid at the end of the term, the 1-2 month term decreased by 0.2%/year to 3.5%/year. The bank interest rates for 3-4 month terms decreased by 0.1%/year, respectively to 3.8-3.9%/year. The 5 month term decreased by 0.2%/year to 4%/year.

Despite the decrease, Bac A Bank still maintains the interest rate for savings terms of 6 months or more at 5%/year or more. Specifically, the interest rate for deposits of 6-7 months decreased by 0.15%/year to 5%/year, and for 8 months decreased by 0.05% to 5.1%/year.

5.1%/year is also the latest savings interest rate for 9-11 month terms after a simultaneous decrease of 0.15%/year.

The 12-month savings interest rate decreased by 0.15%/year to 5.6%/year, while the 13-15 month term decreased by 0.1%/year to 5.65%/year.

The highest interest rate for deposit accounts under 1 billion VND is listed by Bac A Bank at 5.75%/year, applied to 18-36 month term deposits after a 0.1%/year reduction.

Bac A Bank lists deposit interest rates at two different levels, in which the rate applied to deposit accounts from 1 billion VND or more is 0.2% higher per year than that of less than 1 billion VND. At the same time, the bank also adjusted the interest rate down for both different deposit levels with an equivalent reduction.

After this adjustment, the highest interest rate at Bac A Bank is 5.95%/year, applied to term deposits of 18-36 months with deposit amounts of 1 billion VND or more.

Thus, Bac A Bank is the second bank after SeABank to reduce deposit interest rates since the beginning of August, while there have been 12 banks that have increased deposit interest rates, including: Agribank, Eximbank, HDBank, Sacombank, Saigonbank, TPBank, CB, VIB, Dong A Bank, VPBank, Techcombank, and VietBank. Of which, Sacombank is the bank that has increased interest rates twice during this period.

HIGHEST DEPOSITS INTEREST RATES AT BANKS ON AUGUST 14, 2024 (%/YEAR)
BANK 1 MONTH 3 MONTHS 6 MONTHS 9 MONTHS 12 MONTHS 18 MONTHS
AGRIBANK 1.8 2.2 3.2 3.2 4.7 4.7
BIDV 2 2.3 3.3 3.3 4.7 4.7
VIETINBANK 2 2.3 3.3 3.3 4.7 4.7
VIETCOMBANK 1.6 1.9 2.9 2.9 4.6 4.6
ABBANK 3.2 4 5 5.5 6 5.7
ACB 3 3.4 4.15 4.2 4.8
BAC A BANK 3.5 3.8 5 5.1 5.6 5.75
BAOVIETBANK 3.3 4 5.2 5.4 5.8 6
BVBANK 3.7 3.8 5.1 5.5 5.8 6
CBBANK 3.8 4 5.55 5.5 5.7 5.85
DONG A BANK 3.3 3.5 4.5 4.7 5.3 4.7
EXIMBANK 3.5 4.3 5.2 4.5 5.4 5.1
GPBANK 3 3.52 4.85 5.2 5.75 5.85
HDBANK 3.55 3.55 5.1 4.7 5.5 6.1
KIENLONGBANK 3.7 3.7 5.2 5.3 5.6 5.7
LPBANK 3.4 3.5 4.7 4.8 5.1 5.6
MB 3.3 3.7 4.4 4.4 5.1 5
MSB 3.7 3.7 4.6 4.6 5.4 5.4
NAM A BANK 3.1 3.8 4.6 5.1 5.4 5.7
NCB 3.7 4 5.35 5.55 5.7 6.1
OCB 3.7 3.9 4.9 5 5.2 5.4
OCEANBANK 3.4 3.8 4.8 4.9 5.5 6.1
PGBANK 3.2 3.7 5 5 5.5 5.8
PVCOMBANK 3.35 3.55 4.5 4.7 5.1 5.8
SACOMBANK 3.3 3.6 4.9 4.9 5.4 5.6
SAIGONBANK 3.3 3.6 4.8 4.9 5.8 6
SCB 1.6 1.9 2.9 2.9 3.7 3.9
SEABANK 2.95 3.45 4.15 4.29 5 5.75
SHB 3.5 3.6 4.7 4.8 5.2 5.5
TECHCOMBANK 3.05 3.25 4.25 4.25 4.95 4.95
TPBANK 3.5 3.8 4.7 5.2 5.2 5.4
VIB 3.2 3.5 4.6 4.6 5.1
VIET A BANK 3.4 3.7 4.8 4.8 5.4 5.7
VIETBANK 3.6 3.8 4.9 5 5.6 5.9
VPBANK 3.6 3.8 5 5 5.5 5.5

According to the latest data on the developments of the foreign exchange market and the interbank market in the week from August 5 to August 9, 2024, during the week, the State Bank reduced the term purchase interest rates and the issuance interest rates of treasury bills (outright sale) by 25 basis points, from 4.5% to 4.25%.

According to BVSC Securities Company, this move shows the flexibility of the SBV in the context of the possibility of the Fed lowering interest rates becoming clearer, the USD cooling down and the pressure on the VND decreasing. The reduced exchange rate pressure will also allow the SBV to keep monetary policy in a looser state to support growth. BVSC believes that the operating interest rate will remain low in the coming months.

Last week, the SBV injected a net VND13,102 billion in the open market. Through outright sales, the SBV absorbed VND35,750 billion (14-day term) while VND16,200 billion issued previously had matured. At the same time, the SBV purchased VND56,617 billion (7-day term), while VND23,966 billion issued previously had matured.

Overnight, 1-week and 2-week interbank interest rates decreased by 0.27%/year; 0.37%/year; 0.24%/year to 4.42%/year; 4.45%/year; 4.52%/year, respectively.

In the foreign exchange market, the central exchange rate increased by 18 VND/USD from 24,242 VND/USD to 24,260 VND/USD. Meanwhile, the exchange rate at commercial banks decreased sharply by 110 VND/USD from 25,219 VND/USD to 25,109 VND/USD.

Since the beginning of the year, VND has depreciated by 3.46% against USD. This means that VND has appreciated again in the past month (up 1.32% compared to the end of June).

VND appreciated when the DXY index (measuring the strength of the USD) decreased on expectations that the Fed would start cutting interest rates from September, by 100-125 basis points. DXY at one point fell to its lowest level since January 2024, thereby helping other currencies simultaneously narrow their decline.

BVSC forecasts that by the end of 2024, VND will still be supported and continue to narrow its decline, thanks to a weaker DXY due to the Fed's interest rate cut and slowing US economic growth; a narrowing USD-VND interest rate gap (due to the Fed's interest rate cut); more positive foreign currency supply due to a higher trade surplus and remittances sent home at the end of the year.

With exchange rate pressure easing and inflation still under control, BVSC believes that the SBV still has room to maintain an expansionary monetary policy with low operating interest rates to support growth.