Prime Minister Pham Minh Chinh on August 5 asked the central bank, ministries and government agencies to make efforts to achieve a credit growth rate of 15% in 2024.

Prime Minister Pham Minh Chinh chairs a meeting on the banking and financial sector on August 5. Photo: VGP

The Prime Minister stated that stakeholders must use financial tools with flexibility to achieve the said target.

"Local banks should cut costs, adopt information technology and undertake digital transformation to lower lending rates for growth drivers and infrastructure projects," he said, urging state-owned commercial banks to take the lead.

The Prime Minister also stressed the need for open market operations to be in line with market developments. He called for a balanced approach between interest and exchange rates to ensure that credit policy is consistent with macroeconomic conditions and inflation.
Capable credit institutions should be given a higher credit growth target than poorly performing ones, he said.

"Lenders must continue with their interest rebate packages, enhance digital transformation, and combat malpractice for the benefit of the public," PM Chinh said.

According to the Prime Minister, bank savings are worth more than VND15 trillion (nearly US$600 billion). He noted that this is a huge amount of reserves that should be channeled into viable economic and business activities.

The head of government noted that Vietnam's economic outlook for 2024 remains positive. However, there are still challenges and difficulties, such as high inflation, rising interest rates, high demand for loans and foreign exchange in the year-end period, and international geopolitical tensions.

A report from the State Bank of Vietnam showed that total outstanding loans in January-July rose 15% year-on-year to VND14.3 trillion (nearly $570 million). As of July 31, the reference exchange rate was VND24,255 for one US dollar, up 1.6% from the end of 2023. The rate remained low and stable compared to regional and global currencies.

By the end of June 2024, the average lending rate was 8.3% per annum, down 0.96% from the end of 2023, while the average deposit rate was 3.59% per annum, down 1.08% from the end of 2023. Credit growth reached 6% by the end of the second quarter, as directed by the Government and the Prime Minister.

In seven months, the central bank executed comprehensive solutions to facilitate access to bank credit for businesses and citizens, aiming at supporting production and business recovery, enhancing capital absorption, and promoting growth while maintaining macroeconomic stability, controlling inflation, and ensuring the safety of the banking sector.

Government agencies and the central bank have rolled out several financial packages for the economy, including the VND120 trillion ($4.7 billion) soft loan program for affordable housing development and a VND34.4 trillion ($1.37 billion) soft loan program for the forestry and fishery sectors.

The Prime Minister commended the efforts and achievements of the SBV and the entire banking system in the execution of monetary policy, thus contributing to the country's socio-economic development goals. He called for continued efforts and further improvement in the future.