Illustrative image (Source: VNA)

 
Hanoi (VNA) - The State Bank of Vietnam (SBV) has set a credit growth target of 18 percent for this year and it pledged to continue measures to keep credit growth suitable to the country’s economic development.

At a recent conference to review the performance of the banking industry in 2016 and targets for 2017, SBV Deputy Governor Nguyen Thi Hong said that credit growth controlling measures are aimed to ensure the safety and efficiency of the banking sector and the economy.

“They will also be used to ensure that loans go to the business and production sectors prioritised by the Government and prevent over-lending in risky sectors,” she said.

The central bank will continue implementing an active and flexible monetary policy this year--in close coordination with fiscal and other macro policies--to stabilise the interest rate level, just as it successfully did last year, and reduce lending interest rates if possible, Hong added.

In 2016, short-term lending interest rates now hover around 6-9 percent per year while medium and long-term rates stand at 9-11 per cent. Particularly, by the end of September last year, some institutions reduced their deposit rates by 0.3-0.5 percentage points and cut their lending rates by 0.5-1 percentage points.

Nguyen Duc Long, deputy director of the SBV’s Monetary Policy Department, said credit of the whole 2016 grew by 18.71 percent compared to the end of the previous year.

The rate fell within the range of credit growth rate of between 18 percent and 20 percent targeted for 2016.

Credit management has succeeded in curbing the rise of lending to the real estate sector and shifting the capital flow to production industries, Long said.

He added that loans in Vietnam dong increased strongly while lending in US dollar remained low, proving the efficiency of the Government’s anti-dollarisation policy.

Meanwhile, Vietnamese credit institutions expect credit growth to reach 19.12 percent this year, of which lending in dong will rise by 20.2 percent, according to an SBV’s survey on business performance prospects of credit institutions for 2017.

The survey was conducted in the last two months of 2016 by the SBV’s Statistics and Forecasting Department, which questioned all credit institutions and SBV branches nationwide. The rate of response was 89 percent.

The interviewees forecast a 16.76 percent surge in capital mobilised for the whole year with deposits in dong growing by 18.12 percent.

The forecast is based on credit insitutions’ optimistic about stable macro-economic environment, higher GDP growth and inflation being kept at safe level which will facilitate the liquidity of the banking system.

Thanks to an improved business climate, 63 and 85 percent of the surveyed institutions expect their business performance in the first quarter of this year and in the whole year to be better than last year, respectively.-VNA