Banking & Finance

Prime Minister Pham Minh Chinh has directed relevant ministries, branches, and agencies to immediately take measures to ensure the security and safety of financial and securities market operations. In particular, the Ministry of Finance (MoF) and the State Securities Commission of Vietnam (SSC) must publish and provide official and truthful information and request that enterprises disclose information in accordance with the law.

In just the first two months of 2022, individual savings deposits in banks reached VND159 trillion ($6.91 billion), higher than the VND158 trillion ($6.86 billion) recorded in 2021 as a whole. According to analysts, this “unusual” movement was mainly due to commercial banks raising their deposit interest rates. The slowdown in other investment channels, such as real estate, securities, and corporate bonds, also resulted in cash flow returning to the banking system.

Many banks adjusted their deposit interest rates upwards in the first half of April. With inflationary pressure continuing for the foreseeable future and with demand for credit growing during the economic recovery period, deposit rates are forecast to continue to increase.

With the USD consolidating its strength while the risk of inflation in Vietnam is increasing, the KB Securities Company (KBSV) believes that the USD/VND exchange rate may increase slightly, in the range of 0.5-1 per cent, during 2022. The small increase is due to the stable supply of foreign currency.

There were over 927,000 accounts in the derivatives market in the first quarter of the year, with trading down against the fourth quarter of last year. Trading in March was, however, up by 35 per cent against February.

Analysts believe that the State Bank of Vietnam (SBV) will not reverse its monetary policy even though inflationary pressure is increasing due to cost-push factors. According to the VnDirect Securities Company, the three main reasons are that the CPI is still low, domestic demand is still relatively weak, and the SBV still prioritizes the goal of maintaining low lending rates to support the recovery of businesses and the economy after the pandemic.