The lending interest rate this year has declined by approximately two percentage points, which brings the rate to the level attained during the 2005-06 period.— VNA/VNS Photo Tran Viet

These increases helped the banking industry to meet its targets set earlier this year, the SBV disclosed during the regular meeting held yesterday. Moreover, deposits during December still increased by 15.5 per cent despite the deposit interest rate cut of 1.5-2 percentage points against the same period last year. Of the total deposits, the Vietnamese dong deposits surged by 16.31 per cent.

SBV Monetary Policy Department Deputy Director Do Thi Nhung announced that credit rose by 11.8 per cent by December 19. Moreover, the growth rate for the entire year is estimated to reach approximately 13 per cent. This value meets the 12-14 per cent annual credit growth target.

The central bank disclosed that lending this year had been positively oriented towards production and trading, especially in the five prioritised industries of agriculture, exports, supporting industries and small- and medium-sized enterprises (SMEs), as well as Hi-tech businesses.

SBV Credit Department Director Nguyen Tien Dong revealed that lending to the high-tech agriculture and rural development industry by the end of this year was estimated to rise by 16 per cent, while lending to SMEs would surge by 14 per cent.

The lending interest rate this year has declined by approximately two percentage points, which brings the rate to the level attained during the 2005-06 period.

Commercial banks have also cut rates for previous loans. Currently, loans with lending interest rates of more than 15 per cent and 13 per cent account for roughly 3.9 per cent and 10.65 per cent of loans offered, respectively. These values are lower compared with the 6.3 per cent and 19.72 per cent recorded in December last year.

The central bank also officially targets a credit growth rate of 13-15 per cent for next year in accordance with the government's targets for GDP growth, inflation control and capital demand and supply.

Viet Nam Asset Management Company Deputy General Director Doan Van Thang announced during the meeting that the company had bought VND123 trillion (US$5.774 billion) of non-performing loans (NPLs) by December 23, of which, VND4 trillion ($187.79 million) had been resolved.

However, Thang shared that more comprehensive measures and closer co-ordination between relevant agencies must be adopted to better handle the NPLs without the use of the state's budget capital. — VNS