Significant amounts of money flowed from gold and foreign currency channels into dong savings during the first half of this year. — Photo laodong.com.vn

HA NOI (Biz Hub) ― Commercial banks have seen some improved conditions for the first half of the year, according to State Bank of Viet Nam (SBV) reports released on Monday.

Total bank deposits on May 31 grew 6.59 per cent over last December, with deposits in dong increasing 7.55 per cent and deposits in foreign currencies rising by 0.84 per cent.

People's deposits grew most significantly at 11.5 per cent in a context economic conditions and production and business activities were staying tough. This showed that significant amounts of money had flowed from gold and foreign currency channels into dong savings, the SBV said.

In the first five months of the year, the central bank cut policy interest rates and lending rates for some prioritised sectors by 2 per cent, and lowered the maximum rate for dong deposits with terms of less than 12 months by 0.5 per cent.

Lending gradually improved with the total outstanding loan increasing 2.98 per cent in five months, higher than the level of the same period last year. Dong loans were up 5.48 per cent while lending in foreign currencies declined 8.41 per cent.

With regards to prioritised sectors, agriculture and rural area lending increased 4 per cent, export lending rose by 5.74 per cent, small- and medium-sized enterprise lending expanded 1 per cent, and support industry lending edged up 0.02 per cent.

Liquidity was being improved at credit institutions, helping assure payment ability of the banking system. In a context that credit growth remained low, the institutions had accelerated buying Government bonds to pump more money into the economy through the State budget channel and help improve liquidity.

According to the SBV, the foreign currency market and exchange rates were basically stable this year. Exchange rates have tended to increase since April due to re-emerging pressure related to the foreign currency supply-demand balance.

By June 12, the inter-bank exchange rate averaged at VND20,828 per US dollar.

SBV Governor Nguyen Van Binh said on Monday that such positive moves had helped direct the economy to progress following Government expectations during the first half of the year, but there were still a lot of things to be done in the next few months in order to achieve national targets.

SBV monetary department director Nguyen Thi Hong said that important works for the central bank during the remainder of the year were to assure banking system liquidity, dealing with bad debt, and manage money supplies flexibly to control inflation and boost economic growth.

Exchange and interest rates needed reasonable operation to stimulate dong holdings, and stronger supports to businesses were necessary for the nation to reach the credit growth quota of 12 per cent by the end of the year, she said. ― VNS