Vietnam News Network

Vietnam News: Local, National, Business, Sport, Entertainment and Technology

Trade BTCUSD, Bitcoin and Cryptocurrencies

BUY & SELL BTCUSD | View BTCUSD News & Updates

Buy Sell BTCUSD, Bitcoin and Cryptocurrencies

SBV says credit growth to slow down   2009-06-23 - VietNamNet/DTCK, VnMedia, SGTT

The State Bank of Vietnam has predicted that total outstanding loans in June will increase by three percent only, lower than the four percent growth rate in May and five percent in April.


While joint-stock banks believe that they will see breakthroughs in credit growth rates from now to the end of the year as the national economy has become stabilised and capital demand has increased again, the central bank believes that credit growth will slow down in the last months of the year.


Earlier this month, the banking system set the credit growth rate target of 21-23 percent for 2009, while the Government wants the credit growth rate of 25 percent.


Governor of the State Bank of Vietnam Nguyen Van Giau told the press that by the end of May 2009, the banking system had obtained the credit growth rate of 14.02 percent over the end of 2008, while some commercial banks had reported very high credit growth rates, at some 50 percent. Therefore, Giau said that the central bank plans to tighten control over the consumer loans of commercial banks (Currently, banks can negotiate interest rates for consumer loans, while they have to follow the regulation on ceiling lending interest rate for other types of loans).


The State Bank of Vietnam has asked credit institutions to check loans themselves to ensure that securities and consumer loans have been used for the right purposes. Commercial banks have to submit reports about the loan review prior to July 15 to the State Bank.


Preliminary reports by commercial banks showed that by June 18, banks’ outstanding loans under the interest rate subsidy programme had reached 347,282.37 billion dong, an increase of 2.61 percent over the week before. As for consumer loans, outstanding loans had reached 85 trillion, 11.6 percent over the end of 2008. The State Bank has asked commercial banks to tighten control over the quality of consumer loaning after doubts have been raised that some of the capital provided by banks under the demand stimulus programme has been running to the stock market.


Giau predicts that the credit growth rate in June will be some three percent, lower than the four percent in May and five percent in April. If so, the credit growth rate in the first six months of the year will be some 17 percent.


Meanwhile, Standard Chartered Bank, in its latest report about Vietnam’s economy, predicted that the basic interest rate would be kept stable in the last months of 2009 before going up again in mid 2010.


Meanwhile, commercial banks have been raising deposit interest rates continuously with the highest deposit interest rate having exceeded the 10 percent per annum threshold.


Different reasons have been cited to explain the move by banks to raise deposit interest rates continuously. Some experts believe that banks raise interest rates because they anticipate high inflation returning.


However, Member of the National Advisory Council for Monetary Policy Cao Sy Kiem has denied this, saying that banks have raised deposit interest rates because they lack capital.


“The current margin between the deposit and lending interest rates is quite big now, which will make it foolish for banks to mobilise capital.


“If banks wanted to procure capital for the next few months, they would do the opposite than raising deposit interest rates, which will lead to higher costs,” Kiem said.

Other news

Foreign investment reaches $8.7bil during first half of year   2009-06-23

Chinese merchants scrambling to snatch shrimp from Vietnamese   2009-06-23

Wood processors seek markets as exports fall   2009-06-23

Giant insurer to list on HCM City exchange   2009-06-23

Industry urged to lift exports 3%   2009-06-23

Chinese merchants scrambling to snatch shrimp from Vietnamese   2009-06-23

MPI ‘finds’ additional $7 billion in FDI registered capital   2009-06-23

Fines fail to stem tide of imitation goods   2009-06-23

Opening new supermarkets means seeking new opportunities in crisis   2009-06-23

Hanoi Securities Trading Centre to become Hanoi Stock Exchange   2009-06-23

National economy better, but difficulties ahead: experts   2009-06-23

Airbus: Vietnam Airlines is 3rd biggest buyer at Paris show   2009-06-23

Vietnam's H1 FDI inflows down but target in reach   2009-06-23

Phu Quoc Island revokes 12 tourism projects   2009-06-23