Speakers at the workshop (Photo: VietnamPlus) Hanoi (VNA) – Besides support to businesses and industries that are the driving forces for Vietnam’s economic growth, specific solutions and action programmes are needed to stimulate consumption and investment, according to experts.
Speaking at a workshop held on November 17 in Ho Chi Minh City by online newspaper dantri.com.vn, representatives from enterprises questioned if lending interest rates will be reduced further in the coming time.
Representatives from banks confirmed that the lending interest rates they are offering are lower than that of the previous quarter.
Many low-interest credit packages have been launched but credit growth is not as high as expected, reflecting the low capital absorption capacity of businesses and the economy.
As of October 31, credit to the economy reached more than 12.8 quadrillion VND, an increase of 7.39% compared to the end of 2022.
Economic expert Dr Vo Tri Thanh said that from now until the beginning of 2024, it is difficult to cut regulatory interest rates due to exchange rate pressure. “If the Vietnamese dong devalues, not only will cash flows be hurt, but also businesses will face difficulties,” he said.
Commercial banks have decreased lending interest rates by about 2%-2.5%/year compared to the beginning of the year. This reduction exceeded the expectations set by the State Bank of Vietnam (SBV) earlier this year but still does not meet the expectations of businesses.
However, Thanh said that commercial banks' deposit interest rates at the end of 2022 and early 2023 were very high. If they quickly lower lending interest rates, they will incur heavy losses. However, banks all have their own customers and preferential credit packages for each of their priority customer groups.
Economic expert Dr Vo Tri Thanh speaks at the workshop. (Photo: VietnamPlus) "Reducing regulatory interest rates is very difficult, but the State Bank of Vietnam is also urging banks to lower lending interest rates. After the regulatory interest rates are reduced, commercial banks’ interest rates need time to be cut. Hopefully, external interest rates like those in the US will decrease from the middle of next year to help reduce pressure on the banking system, thereby leaving room for further interest rate cuts,” Thanh said.
Opportunities for businesses?
The liquidity of the commercial banking system is very abundant and lending interest rates have decreased quite a lot but businesses have still found difficult to get access to capital.
Economic expert Vo Tri Thanh pointed out three groups of “keywords” on new opportunities for businesses now.
The first is “defence”. Businesses must manage risks, and have a sustainable business development scenario. In an unstable economic situation, businesses must develop plans to respond promptly, and at the same time, learn risk management tools.
The second is to “accumulation”. In the context of many uncertainties in the world and Vietnamese economies, businesses need to flexibly move to potential places and keep up with trends.
Thanh emphasised that businesses should try to seize opportunities within the next three years, particularly in industries of high technology, education, medicine, and semiconductors.
Experts say interest rates may decrease further from 2024. (VietnamPlus) According to Thanh, credit growth is still low compared to the target of 14%, because businesses are facing difficulties in finding markets for their products, and meeting banks’ requirements to get loans. Therefore, businesses need support in many ways from reducing value-added tax, stimulating market demand, increasing disbursement of public investment, and attracting foreign capital.
According to Tran Hoai Phuong, Director of HDBank's Corporate Customer Division, to avoid falling in problems with money flow, businesses should not let their loans fall into overdue debt because if so, they will face difficulties in accessing other loans.
According to Deputy Director of the State Bank of Viet Nam (SBV)'s Ho Chi Minh City Branch Nguyen Duc Lenh, to open up capital flows, from now until the end of the year, it is necessary to stimulate growth.
Lenh held that in the short term, the banking industry will focus on exploiting the seasonal nature as on the occasion of the lunar New Year (Tet) Festival, capital demand will increase. Commercial banks will lend short-term loans to help businesses reduce costs. Enterprises can access about 9 trillion VND with low-interest rates from 4%-6% per year./.
