Commercial banks have repaid 34trillionVND (1.78 billion USD) in bailout funds injected into thesystem by the State Bank of Viet Nam late last year and now had usablecapital on hand of around 30 trillion VND(1.58 billion USD), State BankGovernor Nguyen Van Giau announced on the Government website on Mar. 3.
The central bank had been required to pump funds intothe banking system to ensure payment capacity of banks and capital forproduction, Giau explained. Meanwhile, the shortage of liquidity haddriven banks to severely curtail credit.
Some economists were wondering, however, whether an easing of creditwould now add to mounting inflationary pressure, with some blaming‘confused monetary policy' and easy credit during most of 2009 as majorfactors in the current reheating of consumer prices.
"The budget deficit and bank credit both impact on consumer prices,"admitted Giau. "However, credit has been controlled since last July. Sothe impact of credit on consumer prices has not been any greater thanany number of other market factors [including] the surging prices ofgoods on world markets, high consumer demand during the recent lunarnew year, and rising public utility costs."
Credit growth last year was 37.7 percent, driven largely by theGovernment's economic stimulus package, which included asubsidised-interest loan programme aimed at boosting production duringthe global economic recession.
Credit growth this year has been targeted at a more modest 25 percent,while credit grew during January and February of this year at rates of0.26 percent and 1.14 percent month-on-month, Giau said./.
The central bank had been required to pump funds intothe banking system to ensure payment capacity of banks and capital forproduction, Giau explained. Meanwhile, the shortage of liquidity haddriven banks to severely curtail credit.
Some economists were wondering, however, whether an easing of creditwould now add to mounting inflationary pressure, with some blaming‘confused monetary policy' and easy credit during most of 2009 as majorfactors in the current reheating of consumer prices.
"The budget deficit and bank credit both impact on consumer prices,"admitted Giau. "However, credit has been controlled since last July. Sothe impact of credit on consumer prices has not been any greater thanany number of other market factors [including] the surging prices ofgoods on world markets, high consumer demand during the recent lunarnew year, and rising public utility costs."
Credit growth last year was 37.7 percent, driven largely by theGovernment's economic stimulus package, which included asubsidised-interest loan programme aimed at boosting production duringthe global economic recession.
Credit growth this year has been targeted at a more modest 25 percent,while credit grew during January and February of this year at rates of0.26 percent and 1.14 percent month-on-month, Giau said./.
