Interest rate level to stay unchanged in 2016

Hanoi (VNA) – The State Bank of Vietnam is striving to keep interest rates at their 2015 level, stated Governor Nguyen Van Binh.

The current lending interest rates have fallen by between 0.3 percent and 0.5 percent from 2014.

In the last six months of 2015, credit grew 18 percent, fuelling pressure for increasing interest rates. Thus, it would be hard to reduce the rates in 2016, and the current level is sensible to ensure the government’s target of maintaining inflation rates below 5 percent.

According to the Bank for Investment and Development of Vietnam (BIDV), the economy has shown signs of recovery, growing 6.68 percent last year, the highest recorded in the past five years. These signs are likely to bode well for credit growth to retain at between 16 percent and 18 percent.

Le Minh Hai, Head of Da Nang-Mien Trung Investment JSC said his company has prepared for fluctuations in currency exchange and interest rates.

The firm has sourced all big loans from credit support programmes provided by the Government, investment funds and commercial banks; interest rate changes only affect its small loans, Hai noted.

He considered the current level suitable for his company’s capacity.

Nguyen Duc Anh, head of a tea export business in Hanoi, said enterprises see little negative impact with the current interest rates, but if they rise, it will be worrying, he added.

Cao Sy Kiem, President of Vietnam Small and Medium-Sized Enterprises Association, highlighted that interest rates in Vietnam are higher in comparison with regional countries, and 2016 is still a tough year with various pressures.-VNA