Central bank targets 17 percent credit growth

10:23 | 29/01/2018 Finance - Banking

The State Bank of Vietnam (SBV) has set its sights on 17 percent credit growth this year, slightly down from 18.17 percent last year.

Illustrative image - Source: VNA

“It will be a tough year with many challenges,” SBV deputy governor Nguyen Thi Hong told the media in HCM City on January 25.

“Every move in international markets would directly impact the country. The SBV will strongly focus on the stability of the economy, continue resolving businesses’ problems, control inflation, and issue guidelines for amendments to the Law of Credit Institutions,” she said.

It would follow a pro-active and flexible monetary policy and cut interest rates, besides stabilizing the foreign exchange and gold markets, and the monetary policy in 2018 would work in close conjunction with fiscal and other policies to control inflation and support reasonable economic growth, she promised.

In 2017, credit growth focused on serving production (increase of 12-13 percent for agriculture and rural development), automation and engineering (26 percent), high-tech (20 percent), supporting industries (22 percent) and foreign trade (16 percent).

“Lending next year would focus on the Government’s priority sectors such as agriculture, exports, supporting industries, small- and medium-sized enterprises and hi-tech firms. Lending to risky sectors such as real estate, securities and consumer lending will be limited," Hong said.

She said to reach this year’s credit growth target of 17 percent, the SBV must closely align with the government’s macro-economic policies to make suitable adjustments from time to time.

Vietnam’s foreign reserves have risen to a record 53 billion USD, and the SBV has said it would try to increase them further besides stabilising the foreign exchange market.

Measures will be also taken to stabilise the monetary market and ensure liquidity in the banking system, it has said, adding it will continue to restructure credit institutions and settle non-performing loans.

Hong said the successful monetary management policy last year also contributed to keeping foundation inflation at 1.41 percent, helping the banking system cut lending interest rates by 0.5-1 percentage points.

Theo VNA