Vietnam’s credit growth in the first six months of this year expanded by 7.33 percent compared with the end of 2018, which was higher than the one-year-ago figure at 6.14 percent, according to Le Minh Hung, governor of the State Bank of Vietnam.
Notably, some key sectors, such as manufacturing, processing and exports, reported fairly high credit growth rates in January-June, Hung said at a teleconference between the government and local authorities on July 4.
Regarding interest rates, Hung said the central bank has applied suitable policies to control interest rates following developments in the local macroeconomy and the monetary market. Credit institutions have offered reasonable lending rates to customers by considering deposit rates and credit risks.
As ordered by the government, four State-run banks, Agribank, Vietcombank, VietinBank and BIDV, have made drastic rate cuts since the beginning of this year, focusing on priority sectors. Therefore, bank rates have been stabilised, helping reduce capital costs for the economy.
At present, short-term lending rates range from 6 percent to 9 percent per annum, while those for medium and long tenors are 9 percent to 11 percent per year. Besides this, borrowers with healthy financial status and high credit ratings can be subject to short-term rates, from 4 percent to 5 percent per annum.
Bank credit has largely met credit demands in the investment, production and business sectors. Notably, banks continue focusing on manufacturing, business borrowers and prioritised industries, as per the government’s guideline, while loans for risky sectors have been under strict control, the governor said.
Regarding petitions by local authorities to strengthen agricultural credits for areas suffering from African swine or severe weather, Hung said banks have actively coordinated with some provinces to evaluate damage to farms, especially those in pepper growing, to provide appropriate financial support.
Besides this, banks and relevant agencies have also offered solutions to support farmers in the Central Highlands and in Gia Lai Province, in particular. Further, total outstanding loans for pig farming stand at some VND51 trillion, while credit given to households hit by the African swine flu has reached about VND1.2 trillion.
“We have asked banks, within their authority, to restructure loans, reduce interest rates and provide new loans for production and business models. In the future, we will coordinate with the Ministry of Agriculture and Rural Development to provide further support. The banking sector has so far disbursed some VND17 trillion to assist rice farming,” Hung said.
Regarding exchange rate issues, Hung said the central bank has applied flexible management and regulated central reference rates between the dong and the greenback within a band of 1 percent.
Between January and June, the central bank kept purchasing foreign currencies to push the national foreign reserves to an all-time high. Therefore, the agency has enough sources and tools to ensure the general balance of the economy, Hung said.
In the near future, the banking sector will continue practical moves to support economic growth at localities and assist business activities, Hung added.
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