15:09 | 04/06/2016 Economy
(VEN) - Lending rates have remained stable since the beginning of the year, with a tendency to fall, while solutions to overcome difficulties facing capital earmarked for the economy have been implemented.
Solutions to promote credit growth have been implemented
Commercial banks cut lending rates by 0.5 percent a year for short term and to less than 10 percent a year for medium and long term loans after a dialogue between Prime Minister Nguyen Xuan Phuc and businesses in late April. In addition, credit packages valued at trillions of Vietnamese dong with preferential interest rates were offered, focusing on small and medium-sized enterprises and export businesses.
According to the State Bank of Vietnam (SBV), interest rates remained stable in the first four months of the year. Although deposit rates slightly increased by 0.2-0.3 percent a year, lending rates ranged from 6-9 percent a year for short term and 9-11 percent a year for medium and long term loans. SBV Governor Le Minh Hung said that credit grew 2.99 percent by April 20 compared to the end of last year, contributing to supporting economic growth.
In addition to favorable conditions, maintaining monetary policy and macroeconomic stability has posed challenges for the government and the SBV. Economic growth has shown signs of a slowdown, while the consumer price index in the first four months of the year increased by 1.33 percent compared to the end of last year and 1.89 percent compared to a year ago. In addition, medium and long term credit increased by 5.55 percent, while credit in the real estate sector increased by 3.92 percent as of April 20. A slight increase in deposit rates may create pressure for the SBV in maintaining stability for lending rates.
Together with calling for commercial banks to make cost savings and cut lending rates in some sectors, the SBV will issue a series of necessary solutions to maintain monetary policy and macroeconomic stability. In particular, credit will be strictly controlled to not create pressure on interest rates.
The SBV is reviewing proposals by the business community in terms of accessing credit, declining interest rates, conducting foreign currency loans and implementing Circular 36. To overcome difficulties facing businesses, the SBV will consider loans for priority sectors to encourage trade and production development.
SBV Governor Le Minh Hung said that the SBV will strictly follow macroeconomic developments to flexibly operate exchange rate, contributing to improving the position of the Vietnamese dong.