Credit growth expanded 7.33% in H1 2019: SBV Governor

The credit growth of Vietnamese banks in the first half of this year expanded by 7.33 per cent against the end of 2018, Governor of the State Bank of Viet Nam (SBV) Le Minh Hung said.

 

The rise was higher than that of the same period last year, when the credit rose by 6.14 per cent.

At a Government teleconference with leaders of all 63 cities and provinces nationwide on Thursday, Hung attributed the rise to the contribution from the processing and manufacturing sector as well as exports.

“We see loans in these areas have increased quite well,” Hung said, adding that the lending continually focused on production and business, and the Government’s prioritised sectors including agriculture and rural development, exports, parts-supply industry, small- and medium-d enterprises (SMEs) and high-tech firms, while the capital to risky sectors, such as real estate and securities, was further controlled.

Hung also reported that the SBV managed interest rates in line with macroeconomic developments and the monetary markets, with credit institutions applying reasonable lending rates on the basis of deposit rates and the risks of loans.

The central bank had all necessary tools to effectively control the rate, Hung said, adding since the beginning of the year, the four State-owned commercial banks – Vietcombank, Vietinbank, BIDV, and Agribank – had thoroughly followed the Government and SBV’s direction in reducing interest rates for prioritised sectors. The work helped businesses lower costs and the banking system keep a stable interest rate.

According to Hung, bank loans met the capital demand for production, investment and business, with deposit and lending interest rates stable. Currently, short-term lending rates are at 6-9 per cent per year and 9-11 per cent for medium and long term. For customers with a healthy financial situation and high creditworthiness, lending rates for short-term loans are lower at some 4-5 per cent per year.

Regarding credit for animal husbandry, the Governor said the outstanding balance stood at VND51 trillion (US$2.19 billion), of which VND1.7 trillion resulted from damage caused by African swine fever.

As for the foreign exchange market, Hung said the SBV bought a large amount of foreign currencies in the first half of 2019, pushing foreign exchange reserves recorded in the period to the highest level to date.

Hung said fluctuations in the global market in the first six months were unpredictable but proactive and flexible measures had been taken to keep the domestic foreign exchange market stable.

During the period, the central bank’s reference exchange rate for the US dollar against the Vietnamese dong was adjusted up by 1 per cent, while the rate listed at commercial banks and inter-bank rate were up by 0.3-0.4 per cent.

The SBV would continue to follow a pro-active, flexible and cautious monetary policy as well as working in close conjunction with fiscal and other policies to control inflation, sustain the macro-economy and support economic growth in the remaining months of this year, Hung said.

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