70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Banking & Finance
Vietnam credit growth hits 3.26% in Jan-Jun
Hai Yen 13:00, 2020/07/03
Vietnam’s central bank is willing to increase the credit growth limits for banks from now until the end of the year to support economic growth.

As of June 29, Vietnam’s credit growth stood at 3.26% against early 2020, a significant increase compared to a 1.96% expansion recorded at the end of May, according to Le Minh Hung, governor of the State Bank of Vietnam (SBV).

 SBV Governor Le Minh Hung said Vietnam's credit growth has been on the rise. Photo: SBV. 

This indicates the credit demand has partially recovered following low growth rates in April and May at 0.12% and 0.53%, respectively, Hung said at a government meeting on July 2.

Since early July, the SBV, the country’s central bank, has adjusted credit growth quotas for a number of commercial banks, so that they could timely provide loans for customers, especially in priority fields to aid the country’s economic recovery process.

As of present, lenders have rescheduled debt payment deadlines for nearly 260,000 customers with outstanding loans of VND180 trillion (US$7.73 billion), Hung added.

Additionally, another 421,000 customers are benefiting from softer or reduced interest rates for loans worth VND1,300 trillion (US$55.85 billion), while 240,000 customers have received new loans worth VND1,100 trillion (US$47.41 billion) at interest rates of 0.5 – 2.5% per annum, lower than the rates applied before the outbreak of the pandemic.

According to Hung, the SBV is committed to managing the monetary policy in a flexible manner, aiming to stabilize macro-economic conditions and stimulate growth.

The banking system, therefore, would ensure sufficient capital for the economy, while standing ready to intervene the foreign exchange market in case of necessity.

The SBV is willing to increase the credit growth limits for banks from now until the end of the year to support economic growth, Hung stated. 

To date, the SBV has slashed its policy rates twice by a combined of 100 – 150 basis points to support the country's economic recovery.

Accordingly, the refinancing interest rate now stands at 4.5% per annum, rediscount rate at 3%, overnight interest rate at 5.5% and interest rate via open market operations (OMO) at 3%. 

The SBV also lowered the interest rate cap to 4.25% annually for deposits with maturities of one month to less than six months.

On May 7, the SBV issued a guidance for Vietnam Bank of Social Policies to provide loans at a 0% interest rate worth a total of VND16 trillion (US$686.42 million) for customers directly affected by the pandemic and businesses to pay salaries and wages for furloughed staff.

TAG: Vietnam SBV central bank credit growth 6 months governor Le Minh Hung economic growth interest rates debt payment policy rates OMO rediscount rate refinancing rate
Other news
15:07, 2024/06/08
Number of securities accounts in Vietnam reaches new high
On average, about 4,265 new retail and institutional accounts were added to the market each day.
21:52, 2024/05/27
C.bank not considering dropping credit growth quota for fear of rising bad debts
Given the unique economic conditions of Vietnam, if banks increase credit growth without control measures, the system could return to the hot credit growth period seen before 2011.
18:20, 2024/05/09
Vietnam's non-cash payments reach US$9.8 trillion, 23 times GDP
Many of the banking industry's digital transformation goals for 2025 are on track to be met or exceeded.
21:53, 2024/05/04
PM urges Central bank to ensure positive growth in 2024
Local lenders are encouraged to provide incentives and attract individuals to take out consumer loans.
17:07, 2024/05/03
Vietnamese Gov't to continue VAT cut for second half of 2024
If the VAT reduction policy is continued for the last six months of the year, the total revenue loss for 2024 is projected to be approximately VND47.5 trillion (US$1.87 billion).
21:54, 2024/04/23
3,400 taels of gold purchased at the first-in-11-year auction
Gold trading firm SJC and lender ACB are the two successful bidders at the auction held today.