VN will record 20% credit growth: SBV official

The Deputy Governor of the State Bank of Viet Nam (SBV), Nguyen Thi Hong, told members of the European Chamber of Commerce in Viet Nam (EuroCham) on Monday in Ha Noi that she is optimistic her institution will achieve its yearly goals.- Photo baocongthuong.com.vn

Early this year, after several banks upped interest rates, the SBV lowered inter-bank rates and maintained sufficient monetary supply to ease pressure on deposit and lending rates, Hong said.

The SBV also increased foreign exchange reserves, took measures to stabilise exchange rates and issued more Government bonds, she added.

She said that as of the end of September, credit growth neared 11 per cent and is forecast to reach 18-20 per cent, as targeted.

On exchange rates, Hong said that since the beginning of this year, SBV had fixed daily reference exchange rates based on movements in domestic and global markets, thus stabilising the exchange market. The devaluation of the dong against the US dollar this year was roughly 0.24 per cent, much lower than the 2-3 per cent rate of previous years.

According to the SBV, the stable foreign exchange market has helped it buy US$10.7 billion to date this year, increasing the country's foreign reserves to a record high of more than $40 billion. SBV expects the high reserve to help it adjust the forex market and meet rising demands in the final months of the year.

EuroCham members praised SBV's policies, which have contributed to stabilising the macro economy, monetary and foreign exchange markets and enhancing the health of the domestic banking system. It has helped enhance the confidence of foreign investors about Vietnamese Government policies, they said.

Speaking about the central bank's future policies, Hong said the SBV would continue to manage the monetary policies actively and flexibly in accordance with fiscal policy and other macro policies to meet the Government's targets of boosting sustained growth, controlling inflation and stabilising the macro economy.

Inflation is under the Government's control and is forecast to be roughly 4-4.5 per cent this year, according to Hong.

As for banking restructuring and bad debt settlement, Hong said the SBV would consider submitting to the Government a scheme on restructuring the system of credit organisations in combination with settling bad debts for 2016-20, towards keeping bad debts below 3 per cent and developing a modern, effective and safe banking system by 2020.

At the briefing with the guests, Hong also praised the role of business associations, including EuroCham, in Viet Nam's integration into the global economy, especially given the series of important trade agreements it has signed, such as the Trans-Pacific Partnership, the EU-Viet Nam FTA and the ASEAN Economic Community.

She said EuroCham had acted as a bridge between European firms and Vietnamese Government and firms, adding that it was among the business associations that have made positive proposals to help Viet Nam become an attractive destination for European investors, in particular, and international firms in general.

Hong said the central bank would boost co-operation with EuroCham and work with the association on its proposals relating to the operation of European business in Viet Nam.

EuroCham representatives, for their part, commited to enhancing co-operation with the Vietnamese Government in order to improve the business environment and encourage more foreign direct investment (FDI) from European firms to Viet Nam.