Monetary and credit policies supporting exporters

Nov 13th at 11:32
13-11-2024 11:32:07+07:00

Monetary and credit policies supporting exporters

Loosening monetary policy and credit incentive packages are aimed at easing exchange rate pressures and supporting exporters during the festive period and year ahead.

 

At the National Assembly session last week addressing plans for economic and social development in 2025, lawmakers proposed loosening monetary policies to support specific sectors, including export enterprises.

Some said the State Bank of Vietnam (SBV) should offer specific credit packages to support businesses in sectors that we need to boost, such as agriculture, fisheries, tourism, and export processing.

Additionally, they also said that it is necessary to increase capital more aggressively and enhance the lending capacity of commercial banks to stabilise the exchange rate and prevent hoarding, as well as improve the lending capacity of commercial banks.

Shantanu Chakraborty, country director of the Asian Development Bank in Vietnam, noted that the Asian region continues to maintain growth momentum thanks to two key factors, which are strong domestic demand and the recovery of export activities.

“However, there are significant challenges stemming from the rise of protectionism amid increasing geopolitical tensions, the impact of climate change, and uncertainties from the Chinese real estate market,” Chakraborty said.

Amid the continuing rise in exchange rates, the SBV has already taken stronger measures, including selling foreign currencies for intervention.

On the treasury bill channel, the SBV offered a 28-day term through interest rate auctions. $25 million was successfully auctioned at an interest rate of 3.9 per cent per annum, and $150 million in treasury bills matured, resulting in a net injection of $125 million.

Thus, the SBV injected over $330 million into the banking system through two channels, OMO and treasury bills, in the November 5 trading session. This marked the second consecutive net liquidity injection by the SBV since the beginning of the week after injecting over $980 million through the open market channel in the previous session.

The use of both channels serves a dual purpose of ensuring liquidity for the banking system while reducing pressure on exchange rates by narrowing the interest rate differential in the interbank market.

Vietcombank shared that it has supported businesses in the export field by waiving or reducing various service fees such as collection fees, international transfer fees, and letters of credit payments. Additionally, it has launched several preferential credit packages with competitive, lower-than-market interest rates for both foreign currency short-term loans and VND loans, with fast disbursement times.

“The bank’s solutions to support export businesses have reduced costs, simplified loan procedures, and maximised operational efficiency. Many special preferential loan programmes are designed specifically for export businesses, including working capital financing initiatives with competitive interest rates and fast disbursement,” said a representative of Vietcombank’s Ho Chi Minh City branch.

In analysing the outlook for Vietnam’s macroeconomy, Nguyen Xuan Thanh, an economist and senior lecturer at Fulbright University, emphasised the main driver of growth, industrial production oriented towards exports, is expected to help Vietnam achieve over 7 per cent growth in 2024 and 2025.

“Regarding the monetary market, I propose maintaining the target of 15 per cent credit growth for 2024 and 2025, with the banking system joining forces to solve financial challenges for large corporations in multiple sectors, including real estate,” Thanh said.

“However, challenges remain, including exchange rate fluctuations, domestic consumption, and public-private investment. Public investment disbursement for infrastructure is lagging behind the accelerating economy. I hope the government will implement timely solutions to make public investment a growth driver for GDP in 2025,” said Thanh.

At a conference connecting export businesses and banks organised by the Trade and Investment Promotion Centre of Ho Chi Minh City in collaboration with the SBV’s Ho Chi Minh City branch last week, Nguyen Duc Lenh, deputy director of the branch, confirmed that the short-term lending interest rate for export enterprises is currently capped at 4 per cent per annum.

“This creates favourable conditions for businesses to expand and grow their operations, contributing to boosting this sector’s growth. In the city alone, total credit outstanding for export businesses reached $4.39 billion, accounting for 6.21 per cent of the total credit for five key sectors in the area,” said Lenh.

vir



RELATED STOCK CODE (2)

NEWS SAME CATEGORY

UK stands ready to boost Việt Nam's international financial hub

The United Kingdom's support for Việt Nam in establishing an international financial hub is a significant development that reflects the growing economic ties...

New policy drafted to help non-bank credit institutions develop further

The State Bank of Vietnam (SBV) has finalised a draft circular to help non-bank credit institutions, including financial companies, further expand and develop.

Life insurance premiums increased in Q3 after five quarters of negative growth

The total life insurance premium of new contracts increased for the first time in Q3, a positive signal for the finance – insurance market in the context that the...

Vietnam's credit growth up 10% in 10 months

Vietnam’s central bank has set a credit growth target of around 15% this year.

​Vietnam central bank ready to sell U.S. dollars to keep exchange rate stable

Vietnam's central bank is ready to sell U.S. dollars to the market to keep the exchange rate stable, Governor Nguyen Thi Hong said on Monday.

NA deputies and fertiliser manufacturers call for VAT tax benefits

National Assembly deputies have been debating whether a 5 per cent VAT tax on fertiliser should be reintroduced.

Over 400 e-commerce platforms register with tax authorities: GDT

As many as 412 e-commerce platforms have registered their tax information with Việt Nam’s tax authorities, according to information on the special portal under the...

Sacombank earns top international security certification for 11th consecutive year

Sacombank has achieved the Payment Card Industry Data Security Standard (PCI DSS) certification at the highest level with version 4.0, marking the 11th consecutive...

Exchange and interest rates forecast to remain stable after US election

Experts believe that Vietnam's economic fundamentals are strong enough to withstand the volatility stemming from the US presidential election results.

SBV’s USD/VNĐ central exchange rate hits all time high

The State Bank of Vietnam (SBV)’s central exchange rate of the Vietnamese đồng against the US dollar on Thursday increased by VNĐ25 against the previous day to hit...

Bank stocks

Insurance stocks


MOST READ


Back To Top