Credit growth hits four-year low in first eight months
Hanoi (VNS/VNA) - Credit growth in the first eight months of this year rose by 8.18 percent over the end of last year, the lowest level since 2015, a report from the Ministry of Planning and Investment showed.
The growth rate was 11.5 percent in the same
period of 2017, 9.67 percent in the same period of 2016 and 10.23 percent in
the same period of 2015. Despite the slowdown, the report assessed that
the growth rate is reasonable, helping the monetary market stabilise in the
first eight months of the year.
At a regular cabinet meeting on August 30,
Minister-Chairman of the Government Office Mai Tien Dung said that credit
growth would be curbed at around 17 percent this year.
Despite controlled credit growth, loans for
production and businesses with stable interest rates have still been ensured,
Dung said, noting that in the first eight months of this year, the Government
focused on economic restructuring and did not rely on oil exploitation and
credit expansion for growth.
At the meeting, Deputy Governor of the State Bank
of Vietnam (SBV) Dao Minh Tu also explained that the credit growth target of
about 8.5 percent in the remaining months of this year matches the requirements
for economic growth and inflation control.
Tu highlighted the rosy economic growth with inflation
tamed at below 4 percent over the past eight months, but noted that although
the inflation rate was below the target set by the Government, caution is still
necessary to control the rate in the remaining months of the year.
For the goal of economic stabilisation and
ensuring capital for priority areas, credit institutions have set their own
plans, Tu said.
To control credit growth at 17 percent this year,
SBV Governor Le Minh Hung earlier also affirmed that the SBV would not adjust
upward credit growth limits for commercial banks for the rest of the year
though many banks said they were hoping for higher credit limits as they had
already used up most, if not all, of their assigned quota for the year.
According to current regulations, SBV sets a credit
growth limit for each commercial bank depending on the bank’s health at the
beginning of the year. This is done to control credit growth for the entire
banking system and to support Government targets.
According to banking expert Nguyen Tri Hieu, the
credit slowdown would allow banks to pay more attention to credit quality and
credit risk management.
Currently, interest rates are commonly 6-9 percent
per year for short-term ordinary loans, and 9-11 per year for medium- and
long-term ordinary loans.
For loans in priority sectors, including
agriculture businesses, firms producing goods for export, small- and
medium-sized enterprises, enterprises operating in auxiliary industries and
hi-tech enterprises including startups, the lending interest rate is 6.5
percent per year.-VNS/VNA