Reported at the regular Government press conference in May held on June 2, the Government said that the socio-economic situation in May 2020 had many positive changes. The problem of restoring the domestic market with strong vitality has been launched, large tourist centers welcomed numerous domestic tourists. The airlines and tourism industry suffered badly because COVID-19 has returned to the bustling operation. Another good thing is that many provinces and cities have very high determination in development, striving to complete comprehensively, exceeding the State plan in 2020.
In May 2020, there were 10,700 newly established enterprises, an increase of 36.1% compared to April; the number of enterprises returning to operation increased by 10.5%; the number of enterprises suspending operation pending dissolution procedures decreased by 14.5% and the number of enterprises completing dissolution procedures decreased by 4.8%.
Prominent in the socio-economic development in May and the first 5 months of the year is the macroeconomic continued to be stable. Operating interest rates decreased, monetary policy was implemented flexibly and proactively. Consumer price index (CPI) in May 2020 decreased by 0.03% over the previous month, for the whole 5-month period, the average CPI increased by 4.39% over the same period.
The money market, basic credit is stable, the foreign exchange market operates efficiently and smoothly. As of May 20, capital mobilization increased by 1.85%; credit increased by 1.32% compared to the end of 2019. In May, the State Bank continued to adjust the 2nd rate, the deposit interest rate ceiling, and the lending interest rate ceiling for other sectors. priority areas to share difficulties with businesses.
Vietnam's stock market has been more active based on the situation of domestic good control of COVID-19, production, and business activities that have established a new normal state.
Returning to the evolution of the monetary market, with the capital mobilization growth of 1.85% compared to the end of 2019, our calculations show that the equivalent of nearly 200,000 billion VND has been added to the system in time. Thus, although the interest rate has decreased by 2 times in a row (in March and May), the cash flow into banks still maintains the growth momentum. Moreover, compared with credit growth (the amount of capital injected into the economy), the source of money deposited in banks still increased significantly.
And thanks to a good source of money to the bank, liquidity in the system of the past time is quite abundant. On the interbank market, interest rates of banks are borrowing at the lowest rate in the past 5 years, with overnight and 1-week terms (accounting for over 80% of total transactions) of less than 0.5% per year.
In the first 5 months, banks in Vietnam twice adjusted the ceiling deposit interest rates for less than 6 months terms according to the State Bank's regulations, in which the first time on 17/3 from 5% / year to 4.75% / year and the 2nd on 13/5 to 4.25% / year. Some banks, based on their capital needs, continued to reduce further short-term deposit rates on the first day of June. Currently, common banks listed short-term interest rates around 4% / year, even some banks offer only 3.8% / year.
Interest rates on medium and long-term deposits were also significantly reduced by banks. Currently interest rates from 6 months to 11 months are popular at 5.1-6.6% / year (even as Vietcombank only 4.9% / year); while for 12 months and above the level of 6.6 - 7.4% / year. In addition, if a few months ago, there were some banks offering interest rates from 6 months to less than 12 months to 7.5 - 8% / year, now there is no, interest rates of more than 8% also rarely appear. If so, it only applies to very large deposits from tens to hundreds of billions.
According to banks, the reduction of deposit rates is to reduce costs and have more conditions to lower lending rates to support the economy to overcome difficulties due to the impact of the disease.
>> The State Bank continues to cut operating interest rates
Source: CAFEF
