Interbank interest rate returns to 8.5%

According to data from the Vietnam Interbank Market Research Association (Vira), on February 10, the average interbank interest rate in dong decreased by 0.3-0.5 percentage points in most terms of one month or less and moved sideways for 1-week terms compared to the first session of the week.

The overnight borrowing interest rate – the key term accounting for the majority of transactions – is at 8.5%. 1 week, 2 week and 1 month terms trade from 9% to 9.2%. Thus, compared to 17.5% on February 4, interbank interest rates have cooled significantly, but the level is still higher than last month.

Interbank interest rate is the interest rate on loans between banks through the interbank market when banks lack cash reserves at the State Bank (each bank must maintain a mandatory reserve ratio according to regulations). This interest rate remains at a high level, reflecting the limited liquidity of the system, which can put pressure on savings and lending interest rates in the market for people and businesses.

A major bank leader said that liquidity could be a problem for banks this year. At the same time, he assessed 2026 as a more difficult year for the banking industry.

According to analysis by Mr. Nguyen Hoan Nien, analyst at Shinhan Securities, the above interest rate is only temporary, but interbank interest rates will set a higher level than before, lasting at least until the end of the first quarter of this year.

Meanwhile, in the market strategy report published on February 10, the analysis team of SSI Securities Company commented that overnight interest rate fluctuations in the interbank market in the past half month were “temporary, rather than reflecting systemic risks”.

System liquidity has recently been affected by the seasonality of fiscal cash flows when January 31 is the deadline for public investment disbursement for fiscal year 2025, leading to the State Treasury accelerating the withdrawal process. In addition, the increase in gold prices attracts speculative cash flows, contributing to strained system liquidity in the short term.

According to SSI, the State Bank “has responded promptly and proactively”, injecting liquidity through open market operations and providing additional support through foreign currency swap operations (FX swap). Thanks to that, overnight interest rates have cooled down after being unusually high and are likely to gradually stabilize in the near future.

“Liquidity pressure exists in the context of credit growth being higher than the capital mobilization rate, but this is a cyclical and short-term phenomenon, not reflecting a fundamental change in the macroeconomic foundation. At the present time, interbank interest rate fluctuations should be seen as a technical factor, rather than a signal that economic conditions are deteriorating,” said SSI experts.