Vietnam to Tighten Credit Growth to Combat High Inflation
The government of Vietnam said on its website late last week that it will take measures to curb credit growth to combat high inflation after total credits at end-Oct were up 33.29% since the end of 2008, surpassing 3% of the limit.
The State Bank of Vietnam, the country’s central bank, issued a document on November 20, requesting local commercial banks keep close watch on their lending activities and stabilize the dong-denominated deposit interest rates and restrict loans for non-production.
Also, the central bank ordered local banks to ensure sufficient credits for agricultural, forestry, fisheries production and export activities.
The SBV governor requested its staffs to tighten surveillance over local banks’ lending activities across the country.
Doan Huu Tue, a government banking and financial official, noting the current total money supply and a 33.29% credit growth are not at an alarming level and as a result of the government’s stimulus packages.
However, Tue cautioned if credit growth hit 40% this year [gross domestic product (GDP) growth is targeted at 5.2%] high inflation will likely happen.
The SBV governor has banned local banks to lend to realty, financial investment options based on negotiable interest rates to stabilize the macro situation.
Non-performing loans of Vietnam’s banking system are at a secured level of below 3%, which is within control of the central bank, Tue added.
This year Vietnam targets to achieve GDP growth of 5%-5.2% and curb inflation below 10%, state media reported. (chinhphu.vn, SBV)
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