Experts discuss interest rate trends at an online meeting. (Photo: cafef.vn)
 
Hanoi (VNA) - The central bank must push up banking restructuring and settlement of bad debt to ease pressure on rate hikes and keep rates stable this year, experts agreed at an online meeting on March 28 on 2017 interest rate trends.

Despite some pressure, the Government will strive to prevent significant interest rate rises, the experts predicted in the wake of a recent deposit interest rate rise on certificates of deposits by several banks, which triggered concerns.

Deputy director of the Institute of Economics and Finance, Nguyen Duc Do, said "interest rates will not see significant increases this year and even next year. Rate rises will have negative impacts on the economy and the Government will not let this happen.”

In addition, Do said that the real interest rates in Vietnam were relatively high and the central bank was giving priority to keeping them stable. “The interest rate trend will depend significantly on the way the central bank handles weak commercial banks,” Do said, adding that resolving bad debts must be sped up.

Financial expert Can Van Luc said that as the central bank pledged to stabilise interest rates to create conditions for cutting lending rates, it must be persistent on four measures.

These include speeding up the restructuring of weak banks and the handling of non-performing loans, and implementing measures to raise capital from citizens for business and production, together with controlling credit growth.

“Close monitoring of market developments, especially in the US and China, is also necessary to respond accordingly,” Luc said. “Pay attention to inflation,” he added.

According to Nguyen Duc Hung Linh from the Sai Gon Securities Incorporation, inflation, exchange rates and liquidity in the banking sector will have an impact on interest rates. “Inflation is not a significant worry at the moment,” Linh said, adding that it was expected to grow 4-5 percent this year as fuel prices were not expected to rise significantly.

Exchange rates were expected to remain stable and the pressure for adjustment would not be very high, Linh said, adding that attention must be paid to China’s yuan, however.

“The problem is how to ensure liquidity. Currently, there is an imbalance in terms of deposits and credits,” Linh said. In 2017, the central bank should adopt measures to ensure a positive overall balance of payments.

The central bank on March 27 confirmed that the liquidity of the banking system remained good and  interest rates were stable.-VNA