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| Staff at HD Bank in the capital serve customers. The central bank reported that lending in Vietnamese dong by September 18 rose 9.98 per cent while lending in US dollars declined 13.05 per cent so far this year. — VNA/VNS Photo Tran Viet |
HA NOI (Biz Hub) — Credit growth by September 18 rose 5.83 per cent against last December, according to the State Bank of Viet Nam.
Director of the SBV's Monetary Policy Department Nguyen Thi Hong said that the rise was positive, explaining that last year, the same period saw only a growth rate of 2.52 per cent.
Lending in Vietnamese dong rose 9.98 per cent while lending in US dollars declined 13.05 per cent.
Deposits during the period surged 11.74 per cent, of which deposits in dong increased 11.63 per cent while US dollar deposits rose 12.43 per cent.
The central bank reported that the loan-to-deposit ratio (LDR) also declined slightly to 92.21 per cent from 93.7 per cent late last year.
Industry insiders predicted that deposit interest rates were unlikely to fall further, although commercial banks may decide to lower lending rates by 0.5-1 per cent for the rest of the year to boost lending growth at the year-end.
In recent months, banks have constantly been launching preferential credit programmes for consumers and good businesses. However, lending has remained low and some lenders even reported that lending declined.
Many businesses suggest banks aggressively cut interest rates to balance supply and demand. The Prime Minister recently asked the central bank to operate interest rates in accordance with inflation to boost the economy.
Experts and some bank executives admitted it would be better if interest rates were further reduced, but also said that the interest rate was no longer a barrier to businesses, especially good ones, as lending rates were now the same as in the 2005-06 period.
Commercial banks currently offered dong lending rates of 7-9 per cent per year for short-term loans for prioritised sectors including agricultural and rural development, export, support industries, small- and medium-sized enterprises and high-tech enterprises; 9-11 per cent for short-term loans for other production and business; and 12- 13 per cent for medium and long terms.
Several enterprises with healthy and transparent finances as well as effective business would get loans with interest rates of 6.5-7 per cent per year. — VNS