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It’s not easy to push up dollar lending   2012-03-28 - VnExpress

Bankers have denied the opinion that the outstanding loans in dollars have increased sharply because businesses now hurry to borrow dollars before the new regulation takes effect on May 2. Meanwhile, the dollar price increases in recent days have been attributed to the new regulation which stipulates that the foreign currency position of every bank must not be higher than 20 percent by the end of the day.


Le Quang Trung, Deputy General Director of VIB Bank, said that the foreign currency credit has increased slightly, but inconsiderably. He also does not think that businesses rush to borrow dollars, because in order to be able to borrow dollars, businesses need to be healthy enough and they would only get disbursement after the banks carefully consider their business projects.

Also according to Trung, the mobilized capital in dollars has increased by 5 percent in comparison with that by December 31, 2011.

However, commercial banks have prioritized to provide loans in foreign currencies to import and export companies which need foreign currencies to import essential goods, such as fertilizer and petroleum products. Meanwhile, bankers have to consider the proposals for dollar loans from trade companies thoroughly, even though their dollar supply is now profuse.

General Director of another big joint stock bank also said that most businesses now hesitate to borrow dollar. He said that in the past, a lot of businesses borrowed dollars, but they could not pay debts because of the big exchange rate fluctuations. Therefore, bankers understand that they would face high risks if lending to the subjects.

Experts have also pointed out that the continued dollar price increases in the last four or five days not because of the high demand--when businesses rush to buy dollars, but because the State Bank has lowered the foreign currency position from 30 percent to 20 percent.

Trung said that with the new regulation, bankers would have to adjust their business plans to get adapted to the new circumstances. In the past, when the allowed foreign currency position was 30 percent, if banks still could not buy dollars on the interbank market, they would sell the dollars from its capital source.

Meanwhile, at present, banks would not dare to sell the dollars from their capital source, and they have to buy dollars on the interbank market. If so, both the demand and supply would appear at the same time on the foreign currency market, thus leading to the worry about the possible dollar increase.

Meanwhile, there has been no sign of uncertainties for the foreign exchange rate, while the dollar prices quoted by commercial banks are still within the trading bands stipulated by the central bank.

General Director of Eximbank Truong Van Phuoc has also affirmed that the foreign currency credit of the bank in the first two months of the year did not see any big changes. The bank mostly disbursed dollar loans in the last months of the year.

Phuoc also said that businesses would think carefully before deciding to borrow dollars. The current dollar interest rates are now between 7 and 9 percent, which is closer to the dong lending interest rate. Therefore, the interest rate gap is no more an attractive thing for businesses.

When asked to comment about the unexpected dollar price increases in recent days, Phuoc said that this could be seen as the reactions of the banks to the new decision on the foreign currency position.

With the previous regulation, a bank with the capital of 3 trillion dong, would be able to buy and sell 900 billion dong, or 43-45 million dollars, Nowadays, as the foreign currency position is lowered to 20 percent, the bank would be able to buy and sell 600 billion dong, or 30 million dollars.

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