Vietnam PM: to Lower Borrowing Costs to Boost Economic Growth

Prime Minister Nguyen Tan Dung has requested the central bank take measures to push down lending costs to help local businesses boost production and business in order to achieve the GDP growth of 6.5% this year.

 

Though the economy grew by 5.83% in the first quarter this year, much higher than last year it still faces challenges such a drop in foreign direct investments, high lending interest rates, and a widening trade gap, the government said at a monthly meeting in Hanoi on April 2.

 

Lending rates are relatively high and the State Bank of Vietnam, the country’s central bank, is discussing measures to lower rates at the government’s request, the SBV’s Deputy Governor Nguyen Dong Tien told a press briefing Thursday.

 

The SBV will consider letting local commercial banks to provide short-term loans with negotiable interest rates, Deputy Governor Tien noted.

 

“The central bank is discuss measures to pump cash flows into the economy via open market operations (OMO), refinance loans as well as clear unhealthy competition to boost the domestic confidence in the dong,” Tien said.

 

Chairman of the Government Office Nguyen Xuan Phuc noted that the government will let commercial banks to boost lending to effective investment projects, fully tap the price-stabilizing fund to stabilize prices of petroleum products and major essential goods including cement, steel and sugar.

 

Total outstanding loans of Vietnam’s economy at end-March rose 2.95% and the broadest measure of total money supply, M2, rose 2.3% from the end of 2009, the Ministry of Planning and Investment said in a statement. (chinhphu.vn)