At a conference held by the central bank on July 9, Binh announced this year's first half credit growth of 3.52%, which was largely due to a 12.03% growth in foreign credit and 2.17% growth in dong credit.

The low credit growth, which has stirred concerns in recent weeks, was blamed on weak capital absorption capacity of the economy, unsolved budget debts and the process of handling collaterals along with the loan underwriting mechanism for enterprises.

In H2, the central bank will focus on managing bad debts, raising total demand and facilitating market recovery.

Policy makers said that credit demand in the second half was always twice than that of the first half. They expressed optimistic provisionary views over the entire year's target of 12 to 14% credit growth.

Earlier, a report by the Monetary Policy Department showed that roughly 87 to 90% of capital sources in banks flew into Government bonds and State Treasury bills.

The central bank on July 9 said that the bond and bill purchases would help credit institutions raise liquidity provision. However, they warned that the holding may probably cause some difficulty if banks were not active in balancing tenures.

In terms of credit structures in H1, credit increased 10% for exports, 5.8% for auxiliary industries and 13% for hi-tech applied production firms. Meanwhile, small and medium sized enterprises showed a 2% increase in credit.