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

Credit growth slows in January   2011-02-16 - VNS

A Habubank office in Ha Noi. The slow-down of credit growth in the dong in January was blamed on high interest rates. — VNA/VNS Photo Tran Viet

A Habubank office in Ha Noi. The slow-down of credit growth in the dong in January was blamed on high interest rates. — VNA/VNS Photo Tran Viet

HA NOI — Credit grew by just 0.43 per cent in January, slowing from December's 2.28-per-cent pace, the State Bank of Viet Nam announced on its website yesterday.

Modest dong credit growth at commercial banks in January was blamed on high interest rates which had encouraged borrowers to seek dollar loans at more modest rates. As a consequence, credit in US dollars expanded by 2.37 per cent in January.

The pattern was an exaggeration of the situation in January a year earlier, when dollar credit growth reached 14.07 per cent while dong credit growth stagnated.

Lending interest rates for dong-denominated loans for consumers or to finance real estate or securities investments ranged as high as 18-20 per cent per year in January, while rates for loans to exporters or to enterprises in rural areas were only slightly more competitive, at 14-16 per cent per year.

Meanwhile, interest rates for dollar-denominated loans averaged 6.37 per cent per year in January.

The State Bank of Viet Nam has targeted credit growth this year at 23 per cent, a modest easing from last year's credit growth of 27.6 per cent.

Other indicators for the dong were all down in January. Total dong deposits in the banking system were down 4.12 per cent from the previous month, even as dollar deposits rose by 4.43 per cent.

Overnight deposit rates in January rose to 11.2 per cent per year on average in January, from 10.5 per cent in December, as inflation pressures increased and bank liquidity tightened before the recent Tet (lunar new year) holidays.

The State Bank of Viet Nam kept the prime rate unchanged at 9 per cent but increased its seven-day reverse repo rate to 11 per cent on January 10, up from 9 per cent in mid-December.

Government bond yields in January also rose to their highest levels since last May.

The State Bank injected VND132 trillion (US$6.3 billion) into the nation's banking system in January 30 to support liquidity and payment demand.

Other news

Concerns arise over proposed condo leasehold policy   2011-02-16

Shares decline on low trading volumes   2011-02-16

Longer warranties urged on transport infrastructure   2011-02-16

State-owned firms urged to target 15% growth rate   2011-02-16

Japanese logistics firms move in   2011-02-16

Electricity rates to increase next month   2011-02-15

BUSINESS IN BRIEF 15/2   2011-02-15

Inviting Chinese manufacturers to Vietnam – Why not?   2011-02-15

Market prices fluctuate on dong depreciation   2011-02-15

Gold climbs to six-week high   2011-02-15

India, Vietnam spar over feed quality, prices may jump   2011-02-15

US dollar in Vietnam: the currency with three “sides”   2011-02-14

State plans to divest 281 firms, sell stake in others   2011-02-13

BUSINESS IN BRIEF 13/2   2011-02-13