Central bank extends credit growth limits

Transactions at a branch of BIDV (Source: BIDV)

Hanoi - The State Bank of Vietnam (SBV) has extended the credit growth limits for the second time this year to some commercial banks, of which the highest level is up to 30 percent.

Leading banks including four State-owned commercial banks, also introduced a loan package for production and business, supporting small and medium enterprises with preferential interest rates to boost credit growth at the end of the year.

The lending interest rate ranges from 4.8-6.5 percent per year for loans less than six months and 5.5-7.5 percent per year for loans from six to 12 months.

However, home and car loan interest rates of most commercial banks decreased only 10-20 basis points compared to the end of the third quarter, at 7-9.5 percent per year for the fixed interest rate period, then will be adjusted according to the deposit interest rate or the bank's internal capital transfer interest rate at around 10.5-11.5 percent per year.

The interbank interest rate was flat at 0.19 percent per year for the overnight deposit tenor and 0.24 percent per year for the one-week deposit tenor.

Deposit interest rate is also stable at 2.5-3.8 percent per year for tenors of less than six months, 3.7-5 percent per year for six to less than 12 months, 4.9-5.8 percent per year for 12-13 months.

Credit growth was more positive in the last quarter of the year, but commercial banks' liquidity is still abundant, interbank interest rates and deposit interest rates will move sideways in the next few months.

Market fluctuations revolved around conflicting information about the new US economic stimulus package last week. Overall, the optimistic sentiment remained due to the positive developments in the COVID-19 vaccine.

The USD/VND exchange rate listed by commercial banks remained at 23,010/23,220 VND.

The exchange rate on the free market increased by 30 VND per US dollar buying in and 40 VND per US dollar selling out to 23,200/23,240 VND.

The international movement and the domestic foreign currency supply and demand are quite favourable, so the USD/VND exchange rate will keep a sideways trend.

In addition, the public hearing of the US trade representative on Vietnamese currency valuation on December 29 may create a slight upward pressure on the Vietnamese dong.