Governor of the State Bank of Vietnam Nguyen Thi Hong (Photo: Vietnam+)
A conference was held to tackle credit difficulties for production and businesses, promoting economic growth and macro-economy stability on December 7.
During the event, the Governor of the State Bank of Vietnam Nguyen Thi Hong said that moving forward, the decision to maintain credit room or establish a roadmap will be guided by the goal of overcoming limitations and ensuring control criteria for credit risk.
During the conference, the Governor addressed the recommendations from associations and businesses to further decrease interest rates. Despite the global trend of rising interest rates, many countries are still raising their rates to tighten monetary policies, she said. However, in 2023, the State Bank of Vietnam took bold steps by adjusting the operating interest rate four times to regulate the currency.
As a result, the average new loans in the first 10 months of this year have decreased by approximately 3%.
This means that the lending interest rates have returned to pre-COVID-19 levels, which is a significant achievement for the banking sector.
The Governor also encouraged banks to continue reducing costs so that they can further lower interest rates.
The Governor discussed the challenges of managing credit growth in relation to the Vietnamese economy, where the availability of investment capital heavily relies on bank funding.
Currently, Vietnam's credit-to-GDP ratio exceeds 125%, a figure that has raised concerns among international organizations, as Vietnam is among the middle-income countries with the highest credit-to-GDP ratio.
However, in 2023, the economy is expected to face difficulties in accessing investment capital.
The real estate and corporate bond markets are congested, leading to a decrease in the issuance of corporate bonds by businesses, which in turn puts pressure on bank credit.
Balancing the need to promote economic support and ensuring risk control is crucial, as mandated by the Resolution of the National Assembly and the Government.
Short-term solutions must be implemented while also considering long-term and medium-term strategies.
At the conference (Photo: Vietnam+)
The Governor highlighted that as of October 2023, the loan report indicated a total of 17.6 trillion VND, surpassing the entire amount recorded in 2021 (17.6 quadrillion VND). The figure of the entire 2023 is likely to exceed 19 quadrillion VND.
Although this is a substantial amount, it is worth noting that credit growth stands at only 9.15%. This demonstrates that while the banking system continues to provide credit capital to the economy, the focus is primarily on short-term loans and maintaining normal capital turnover.
Alongside the banking industry's dedicated efforts, the Governor urged ministries, departments, and local authorities to prioritise resolving complex legal issues.
The State Bank has never imposed a ban on lending to the real estate sector (Photo: Vietnam+)
The Governor clarified that the State Bank has never prohibited real estate lending but has instead implemented regulations to manage potential risks.
The main issue affecting the current real estate market is the lack of clear legal provisions. Therefore, the Governor urged ministries, branches, and local authorities to actively contribute to solving complex legal problems, in addition to the efforts made by the banking industry.
To enhance access to credit for small and medium-sized enterprises, the Governor recommended boosting the effectiveness of funds like the SME Development Fund and the Credit Guarantee Fund for SMEs./.
