Credit growth likely to reach 11 per cent in 2020 and 12-14 per cent in 2021

December 27, 2020 | 08:49

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The State Bank of Vietnam (SBV) predicts that next year's credit growth is expected to reach at least 12 per cent, after 11 per cent in 2020.

credit growth likely to reach 11 per cent in 2020 and 12 14 per cent in 2021

By December 21, credit grew by 10.14 per cent compared to the end of 2019, up 11.62 per cent on-year.

The State Bank of Vietnam (SBV) estimates that credit growth will reach 11 per cent this year. In 2021, the SBV is setting a goal of 12 per cent growth. However, this number could reach 13-14 per cent, which is optional and can be rationalised in accordance with the market's conditions and the economy.

According to Bao Viet Securities (BVSC), regarding interest rate, since the beginning of 2020, the SBV has made three cuts in policy rates by 1.5-2 per cent per year, in ceiling deposit rate by 0.6-1 per cent per year, and in the priority sector ceiling lending rates by 1.5 per cent per year.

In the meantime, the SBV directed both Vietnamese and foreign credit institutions to reduce costs, sharply lower lending rates, especially in vulnerable areas.

Specifically, the central bank issued Circular No.01/2020/TT-NHNN dated March 13 on debt rescheduling, exemption, or reduction of interest and fees, retention of debt category to assit borrowers affected by the COVID-19 pandemic.

As of November 2020, the average lending interest rate decreased by 1 per cent per year on average, compared to the end of 2019. The maximum short-term lending interest rate in VND for some priority industries and sectors is at 4.5 per cent per year, cited from BVSC.

In 2021, SBV will continually aim at expanding credit effectively, focusing on loans in priority areas and controlling credit strictly for risky areas.

By Lam Tien

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