Credit growth to slow to 6%

Credit growth to slow to 6%

The nation's commercial banking system expects to see credit grow by 6 per cent this year, well below the Government target earlier in the year of 8-10 per cent, said a report in the publication Saigon Economic Times.

Credit growth in HCM City alone was expected to rise by only 5.4 per cent, well shy of the 7.7 per cent pace seen in 2011, according to the State Bank of Viet Nam branch in the city.

Despite the slow growth in lending, the credit structure of commercial banks has changed significantly since the beginning of the year. According to figures on the State Bank website, the rate of short-term capital used for long- and medium-term lending was 17.36 per cent as of October 31, a much higher figure than the 7.58 per cent logged in April.

Interest rates remain under control, with the interbank rate for loans in domestic currency down to 2.5 per cent as of December 16 from a high of up to 4.8 per cent earlier in the month.

The central bank has also increased foreign reserves and actively pumped cash into the banking system to sustain liquidity and stimulate economic growth.

Banks were also seeing success in attracting deposits, which had grown by nearly 16 per cent industry-wide through last month, according to State Bank statistics. Overall, the money supply in the commercial banking system as of November, including cash on hand, deposits at the central bank, and reserves, had risen 15.3 per cent since the beginning of the year.

vietnamnews