Bank Sector_Policy Rate Hike

The SBV announced a policy rate hike effective Oct 25. We have been calling for another rate hike in November, so this one came slightly earlier than anticipated. This is the SBV’s second policy rate hike in 2022, and we would not be overly surprised by another hike before yearend.

The SBV has increased three policy rates: 1) rediscount rate (+1ppt to 4.5%/year), 2) refinancing rate (+1ppt to 6.0%/year), and 3) overnight rate for interbank electronic payments and lending to compensate for capital shortages in clearing payments (+1ppt to 7.0%/year).

In addition, the SBV raised the cap on deposit and lending rates. 1) The maximum rate for demand deposits and term deposits of less than 1 month increased by +50bps to 1.0%/year, 2) Term deposits of 1-to-less than 6 months are capped at 6.0%/year (+1ppt), and 3) Short-term lending rate is capped at 5.5%/year (+1ppt).

For the complete report, please access here: Bank_Sector_Increase Policy rates_Oct 22

Analyst: Tanh Tran, tanh.tran@yuanta.com.vn