Resumen
Asymmetries in the Vietnamese lending-deposit rate spread (intermediation premium) were documented. Empirical results revealed that the intermediation premium adjusts to the threshold faster when the deposit rates increase relative to the lending rates than when the deposit rates move in the opposite direction. Additionally, the empirical findings indicate that Vietnamese commercial banks exhibit predatory rate setting behavior. The results also show bidirectional Granger causality between the Vietnamese lending rate and the deposit rate, indicating that the lending rate and the deposit rate affect each other?s movements. These results suggest that monetary authority can use its countercyclical monetary policy instruments to achieve its macroeconomics objectives in the short run. However, the estimation results of the GARCH (1,2) )-in-Mean model suggest that they should intervene more frequently and by small policy measures to minimize the conditional variance of the intermediation premium to minimize the magnitude of the cycle of the lending rate. Key Words: asymmetry; lending rate; deposit rate; intermediation premium; Vietnam; predatory pricing behavior; Granger causality; countercyclical monetary policy.