Banking & Finance

It is forecast that Vietnam will attract $18 billion in overseas remittances this year, ranking it eighth in the world and third in the Asia-Pacific region. Thanks to the large volume, supply and demand of foreign currencies will be relatively balanced in the year-end period and help the USD/VND exchange rate remain stable.

A resurgence in banking stocks over recent days helped the VN-Index climb to a new record in hitting 1,500 points. This shows that bad debts rising but kept under control has not affected banking stocks to any great extent and the expansion of credit would take them even higher.

There are three factors helping banks operate effectively, according to the Bank for Investment and Development of Vietnam Securities Company: loosening credit space, increasing the proportion of corporate bonds, and effectively mobilizing current account savings account (CASA) deposits. It is forecast that growth in the banking sector will reach 22.2 per cent next year with a lower profit base compared to 2021.

Sixteen commercial banks have agreed to cut their lending interest rates from July 15, 2021, to the end of the year, with customers saving an estimated VND20.61 trillion ($906.11 million). In which, four State-owned commercial banks committed to a dedicated support package of VND4 trillion ($175.81 million) to reduce interest rates and service fees.

The value of foreign investors’ portfolios in Vietnam’s stock market has increased 6.5-fold over the course of the past decade, to $50 billion. According to Mr. Andy Ho, CEO of VinaCapital Group, when Vietnam is upgraded from MSCI Frontier Markets to MSCI Emerging Markets, interest among foreign investors will increase at least 100-fold compared to now.

Data from SSI Research shows that the State Bank of Vietnam’s purchase of foreign currency from commercial banks has injected some VND60 trillion ($2.64 billion) into the market, helping reduce the interbank interest rate.