Loan interest rates are unlikely to decrease further

Mr. Le Van The – Chairman of Hop Phat Construction and Structure Co., Ltd. – said that market demand improved so in the third quarter, a number of large orders returned. Currently, the number of orders at businesses increased by about 20-30% over the same period, leading to an increase in demand for working capital loans.

“We currently have a credit limit with an interest rate of 6%, about 3% lower than last year. This interest rate is relatively reasonable for businesses,” Mr. The said.

With individual customer groups, as noted by VnExpresshome loan interest rates are maintained at 5.5% to 8.5%, depending on the incentive period and each bank. As for existing customers using floating interest rates, the level has also remained stable in the past few months, from 11-13% at private banks.

The State Bank said that lending interest rates continue to decrease by about 0.96% compared to the end of 2023. Last year, interest rates fell deeply by 2.5% a year.

Recently, the Prime Minister has sent telegrams many times to reduce lending interest rates to meet the economy’s capital needs. At the same time, the head of the Government also assigned a credit growth target of 15% for the whole year.

BIDV Chief Economist Mr. Can Van Luc said that rising savings interest rates put pressure on output interest rates. Currently, savings interest rates are increasing at some private banks, which is also putting pressure on output interest rates. At the same time, bad debt is also pressure on banks to increase risk provisions, narrowing profit margins, thereby affecting the ability to reduce loan interest rates.

Currently, the deposit interest rate is currently about 0.5% higher than the bottom set in the second quarter and still lower than the Covid-19 period. The increase in savings interest rates takes place in the context that banks’ capital mobilization speed is much lower than credit growth.

The analysis team of Vietcombank Securities (VCBS) estimates that the adjusted increase in deposit interest rates from the second quarter of 2024 will have a delay of 3-6 months to reflect in lending interest rates. Lending interest rates in the market are expected to move sideways in the fourth quarter and increase by 0.5-0.7% in 2025 in the context of economic recovery and stronger credit demand.

Governor Nguyen Thi Hong’s recent explanation to the National Assembly also said that further reducing loan interest rates in the coming time will be very difficult. Lending interest rates have tended to fall sharply recently while the demand for credit capital has tended to increase, which will put pressure on the interest rate level. In addition, the reduction of domestic interest rates also increases pressure on the exchange rate and the domestic foreign exchange market.

Commenting on current deposit interest rates, Mr. Tran Hoai Nam, Deputy General Director of HDBank, assessed that interest rates have increased slightly but the general level is still at a very low level. Currently, the banking industry has passed the difficult period of liquidity and can fully meet the demand for 15% credit growth this year.

At the same time, with the US Federal Reserve’s (Fed) trend of reducing interest rates, capital resources at banks are receiving additional support from foreign capital flows, thereby helping banks maintain more stable capital costs. in the near future. Deputy General Director of HDBank commented that with a GDP growth rate of about 7% and the current inflation index, lending interest rates are very well supporting business activities of enterprises.