HANOI: The period of cheap money is coming to an end as deposit interest rates are increasing, experts forecast.

In June, 24 domestic commercial banks increased their deposit interest rates.

This month, several banks adjusted their rates, including Eximbank, NCB, SeABank, BaoVietBank and Saigonbank.

Notably, some banks increased the rates for deposits under six months to 4.7% per year, close to the cap of 4.75% per year, as prescribed by the State Bank of Vietnam.

Experts said deposit interest rates will increase further in the third quarter, in the wake of salary increases and exchange rate differences.

The expected recovery in credit demand, thanks to the positive prospects for the manufacturing industry and export activities, will also lead to banks needing to raise capital, which will cause deposit interest rates to increase further.

Deposit interest rate in the country are still lower than the average of 5.05% a year before Covid.

Vietcombank Securities Company forecasts that deposit interest rates in the third quarter of 2024 will increase by about 0.3 percentage points to 0.5 percentage points.

Banking expert Nguyen Tri Hieu said economic growth is strong, and individuals and enterprises are borrowing more from banks.

This is pushing up credit demand, and banks are increasing interest rates to attract deposits to meet customers’ capital needs.

According to a bank leader who declined to be named, it will not be easy for them to maintain interest rates like those in the first few months of this year.

Banks forecast the rates to follow an upward trend towards the end of the year.

The leader said, looking ahead, his bank would make decisions based on forecasts of foreign exchange rates in the market.

 - ANN