09:46 | 19/09/2016 Economy
(VEN) - The State Bank of Vietnam (SBV) has made further efforts to reduce lending rates and strengthen support for businesses.
The banking system needs to actively reduce operating costs and handle bad debt
According to SBV Deputy Governor Nguyen Thi Hong, maintaining interest rates stability is seen as a difficult task, given forecast for higher inflation.
To stabilize deposit interest rates, the SBV has closely monitored the market and ensured the liquidity of the banking system, while interbank interest rates have been maintained at an appropriate level. In particular, lending rates have declined by 0.5 percent a year in short-term loans, while standing at a maximum of 10 percent a year in medium and long-term loans.
Hong said that the SBV has instructed credit institutions to maintain stable interest rates, save costs and improve business efficiency, contributing to reducing lending rates in the last months of the year.
The National Financial Supervisory Commission (NFSC) pointed out that stable liquidity in the banking system provides room for cutting interest rates in the remaining months of this year. Government bond interest rate continues to decline and inflation remains low at 3.5-4 percent, while exchange rate and the foreign exchange market are stable. “There are many favorable conditions to reduce interest rates. However, the banking system needs to actively reduce operating costs and handle bad debt,” NFSC stressed.
SBV’s Monetary Policy Department Deputy Director General Nguyen Duc Long indicated that total means of payments increased by 9.45 percent, while capital raise increased by 9.94 percent by July 29. The SBV has successfully ensured the liquidity of the banking system, while interbank interest rates have declined.
Stable liquidity and capital focusing on priority sectors have helped credit maintain good growth over the months. Credit growth increased by 8.54 percent by July 29 compared to the end of 2015, providing positive support for trade and production, SBV’s Credit Department Director Nguyen Tien Dong said. In addition, credit programs have been effectively implemented, contributing to ensuring socioeconomic development. Lending for agriculture, exports, support industries, high-tech application and small and medium-sized enterprises (SMEs) increased by 6.4 percent, over 3 percent, 3 percent, nearly 1 percent and 3.3 percent, respectively.
SBV Deputy Governor Nguyen Thi Hong:
The banking sector will continue implementing the monetary policy in an active and flexible manner and in close coordination with the fiscal policy and other macroeconomic policies to control inflation, ensure macroeconomic stability and contribute to economic growth. In particular, the SBV will take measures to remove difficulties for businesses.