The Viet Nam Asset Management Company (VAMC) has announced increases in reference interest rates on the bad debts in Vietnamese dong and US dollar it purchased.

Accordingly, the reference rate for debts for the Vietnamese dong is 9.9 per cent and 4.9 per cent for debts in United States (US) dollar per year. These rates are 0.3 percentage points and 0.5 percentage points higher than the rates applied in 2016.

The reference interest rate for debts in euro, however, is lower by 0.1 percentage points to 4.7 per cent.

The VAMC’s interest rates on bad debts are calculated based on the average 12-month deposit rates of four commercials, namely Agribank, BIDV, Vietinbank and Vietcombank.

Latest statistics showed that VAMC bought a total sum of more than VND266.3 trillion (US$11.7 billion) of bad debts as of the end of August.

The company expected to buy additional VND35 trillion to VND40 trillion worth of bad debts from credit institutions in the remaining months of this year.

The VAMC now has a charter capital of VND2 trillion which is planned to increase to VND5 trillion in 2018 and VND10 trillion in 2020.

According to a recent report by the National Financial Supervisory Committee, the bad debt ratio of Viet Nam was at 2.9 per cent as of September.

Credit institutions handled VND47 trillion of bad debts in January-July, 31.7 per cent of which was sold to the VAMC. — VNS