Deposits at banks in Vietnam net increased by a record high of nearly VND1,700 trillion (roughly $70 billion) in 2023 although interest rates continuously dropped during the year, according to the central bank.
The strong cash flow helped raise the total deposit in the banking system to over VND13,500 trillion ($554 billion) as of the end of 2023, up 14% year-on-year, the State Bank of Vietnam (SBV) stated at a conference on Monday.
Banks have been cutting deposit interest rates to all-time lows amid well-tamed inflation and lackluster credit demand. The highest interest rates commonly offered by banks stand below 6% per year for longer-than-12-month terms. State-controlled Vietcombank even has lowered its rate on one- and two-month deposits to 1.9%.
During 2023, the SBV cut its policy rates four times, bucking a global trend.
After a tepid start, credit growth accelerated towards the year-end, hitting 13.71% in the whole year, slightly lower than 14.18% achieved in 2022.
Speaking at the conference, SBV Governor Nguyen Thi Hong highlighted that the central bank’s monetary policy management helped controlled inflation at 3.25%, below the regulatory ceiling.
In addition, the banking regulator supported liquidity for banks, kept the monetary market stable, and bought in forex to build up the reserves.
Hong noted that interest rates on deposits and new loans at banks had decreased by more than 2.5 percentage points last year compared to end-2022.