The average lending rate in Vietnam has recently climbed to 10.5% per annum, according to new data released by the State Bank of Vietnam. This increase of 0.4 percentage points from the previous month indicates the most substantial adjustment in interest rates by banks in the past year.

State-owned and private commercial banks have been disbursing loans at rates ranging from 8.1% to 10.5% per annum. Currently, nearly ten banks are offering actual lending rates exceeding 10.5%, depending on customer profiles, risk levels, financial capacity, and collateral.

For instance, TPBank has set its average lending rate for individuals at 10.95%, while OCB offers 10.78%, and BVBank has a rate of 10.45%. Some banks, such as SeABank, have specified rates based on loan terms, with short-term loans for individuals at 10.18% and medium to long-term loans at 10.44%. HDBank's rates are slightly lower, at 8.5% for short-term and 10.4% for medium to long-term loans.

The State Bank has maintained a short-term lending rate of 3.9% per annum for priority sectors, including exports, agriculture, supporting industries, small and medium enterprises, and high-tech applications. This figure is close to the ceiling for short-term lending rates, which is set at 4%.

In line with the rising lending rates, banks have also increased deposit interest rates across most terms. Savings accounts with terms of 6-12 months now yield an average interest rate of 6.1% to 7.6%, while rates for terms over 24 months range from 7.1% to 7.8%, both reflecting a 0.2 percentage point increase from the previous month. These rates are the highest seen in the past year.

Currently, banks are maintaining a spread of about 3-4% between deposit and lending rates, which has slightly increased since the beginning of the year. Experts and analysts predict that interest rates may remain high in the coming months due to liquidity issues within the banking system.

In a recent investment outlook report, the Rong Viet Securities Company (VDSC) noted that the high interest rates are primarily due to liquidity shortages. Adjustments to the calculation of state treasury deposits in the loan-to-deposit ratio (LDR) and increasing the ratio of short-term capital for medium to long-term lending have alleviated some pressure, but not enough to resolve the issue entirely.

Trần Văn Tánh, Head of Institutional Customer Analysis at Yuanta Vietnam Securities Company, commented that while the State Bank aims to lower lending rates to support the economy, high mobilization costs limit the ability of commercial banks to reduce rates significantly. One of the main challenges in reducing interest rates is the priority placed on stabilizing the exchange rate.

According to VDSC, as major central banks (in the US, Japan, and the EU) maintain cautious and somewhat tightening monetary policies, the State Bank may need to keep the USD/VND interest rate differential attractive enough to retain foreign currency inflows into the system. However, the analysts believe that a scenario of reduced interest rates could still occur towards the end of the year, albeit at a moderate pace, as the system requires time to adjust and balance capital costs after significant increases in the first half of the year.

An expert from the United Overseas Bank (UOB), based in Singapore, stated that the most reasonable scenario is for the State Bank to maintain interest rates in the second half of the year. They noted that increasing operational interest rates would likely have limited effectiveness against supply-side inflation, such as rising energy prices or input costs. Conversely, reducing rates seems challenging while inflation remains near the operational target. Core inflation rose by 4.12% in the first half of the year, with the State Bank aiming to keep average inflation for the entire year around 4.5%.