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| The State Bank has reduced operating interest rates four times in a row in recent months (Illustration photo: KT) |
The State Bank of Vietnam (SBV) and many experts believe that the FED's interest rate hike will not have too much impact on Vietnam's economy and finance. Moreover, Vietnam has been ahead of the curve, anticipating developments in the world economy, making a series of moves such as reducing interest rates and stabilizing exchange rates.
According to the report of the State Bank of Vietnam, by the end of June 2023, the average deposit and lending interest rates of new transactions in VND of commercial banks (CBs) decreased by about 1.0%/year compared to the end of 2022. CBs have proactively adjusted and implemented preferential credit programs/packages to reduce lending interest rates by about 0.5-3.0%/year depending on the customer for new loans. In the first 6 months of the year, credit increased by 4.73%, the SBV adjusted up the credit growth target for 2023 for credit institutions (CIs) with the system-wide rate of about 14%.
“In the first months of 2023, due to the impact of many aspects, one is that our country's difficulties still exist after 2 years of the pandemic, two is that the world economic situation is still complicated, bank credit is also greatly affected, however, there are still major targets that the State Bank ensures: macroeconomic stability, controlling expected inflation, maintaining stable currency value, and interest rates are managed very drastically", said Mr. Dao Minh Tu, Deputy Governor of the State Bank.
The State Bank of Vietnam’s four consecutive reductions in operating interest rates in recent months are considered a necessary step to increase access to capital and remove difficulties for people and businesses under the Government’s direction. Many opinions say that interest rates still have room to decrease further this year.
“Compared to the end of 2022, the interest rate level has decreased by about 2.5 - 3%. We have preferential packages to help customers recover production and business. For example, the package of 7.99% for short-term loans and 10.49% for long-term loans,” said Mr. Bui Thanh Trung, Deputy General Director of OCB Bank.
The USD has fallen to its lowest level in more than a year. Since the beginning of 2023, the USD/VND exchange rate has fluctuated around 23,240 - 23,630 VND/USD, with a margin of +/- 1.9% compared to the central rate of the State Bank. This is considered to be significantly more stable than in 2022 when it peaked at 24,692 VND/USD, up 4.2% compared to the central rate.
The important factor supporting the stable exchange rate in recent times is the positive increase in foreign currency supply in many areas. The most obvious is that international visitors stay longer and spend more. Nearly 5.6 million international visitors have come to Vietnam since the beginning of the year. Along with that, goods continue to have a trade surplus of more than 12 billion USD, greatly supplementing the domestic foreign currency supply. The race to increase interest rates globally has made multinational corporations hesitate to invest, however, FDI capital inflows into Vietnam in recent times have still disbursed more than 10 billion USD. Synchronous policy coordination will reduce pressure on Vietnam's exchange rate this year.
“When the exchange rate is stabilized, it has helped a lot for logistics businesses and import-export businesses in general. International service fees by sea or air must be paid in USD,” said Mr. Tran Duc Nghia - General Director of Delta International Joint Stock Company.
The second half outlook reports of most financial institutions believe that the outlook for the USD in the second half of 2023 is positive. The general expectation is that this currency will anchor at a high level thanks to attractive interest rates and its role as a safe haven in the context of many uncertainties in the world economy. Although there will be cyclical fluctuations at the end of the year when the demand for foreign currency increases to pay for international orders, experts say it will not cause significant disruption. Favorable factors from the beginning of the year will continue to be maintained, creating stability for the value of the Vietnamese currency in the face of world fluctuations.
According to Bao Ngoc/VOV1
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