Credit growth expanded 7.33 percent in H1

Governor of the State Bank of Vietnam Le Minh Hung speaks at the conference. (Photo: baochinhphu.vn)

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

At a Government teleconference with leaders of all 63 cities and provinces nationwide on July 4, the SBV Governor 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-sized enterprises (SMEs) and high-tech firms, while the capital to risky sectors, such as real estate and securities, was further controlled.

He 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, the Governor 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 percent per year and 9-11 percent 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 percent per year.

As for the foreign exchange market, the Governor 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.

He 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 percent, while the rate listed at commercial banks and inter-bank rate were up by 0.3-0.4 percent.

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.