Reduce lending interest rates

This morning (June 19), the State Bank of Vietnam (SBV) held an online industry-wide conference on solutions to boost credit growth in 2024.

The conference was co-chaired by Governor of the State Bank of Vietnam Nguyen Thi Hong and Permanent Deputy Governor Dao Minh Tu.

Credit growth at 10-year low

Data shows that as of June 14, 2024, credit growth increased by 3.79% compared to the end of 2023; credit growth rate gradually improved over the months but was still at the bottom of the past 10 years.

The State Bank of Vietnam said that in some localities, credit growth is still low; some credit institutions have credit growth lower than the general credit growth rate, even negative growth.

During the 2014-2024 period, there were years with slow credit growth in the first half of the year: 2014 at 3.72%; 2020 at 3.65%; 2023 at 4.71% and 2024 at 3.79% (as of June 14, 2024).

Meanwhile, credit growth in the first half of the year in 2022 was very high, up to 0.44%; 2021 was 6.44%; 2019 was 7.36%; 2018 was 7.86%; 2017 was 9.01%; 2016 was 8.21%; 2015 was 7.86%...

Deputy Governor Dao Minh Tu informed that up to now, there are still 23 provinces with negative credit growth, 29 provinces with growth of no more than 2%. Regarding the credit institution system, besides banks with growth of more than 10%, there are still banks with negative credit of more than 4%.

According to the leader of the State Bank, this signal shows that overall domestic credit demand has not yet recovered strongly, many production and service industries considered traditional driving forces of the economy still have certain difficulties, a segment of customers have a need to borrow capital but have not yet built a feasible production and business plan, have not met the loan conditions, along with changes in people's consumption trends.

"Key" solution to promote credit growth

From now until the end of the year, the State Bank of Vietnam expects positive credit growth in the last months of the year. Deputy Governor of the State Bank of Vietnam Dao Minh Tu said that the State Bank of Vietnam will continue to identify key tasks and solutions for credit management in the last 6 months of 2024, specifically as follows:

Conducting monetary policy proactively, flexibly, promptly, effectively, and in a synchronous, harmonious, and close coordination with fiscal policy and other macroeconomic policies contributes to supporting and promoting economic growth.

Deputy Governor of the State Bank of Vietnam Dao Minh Tu

In the context of continued macroeconomic stability and controlled inflation, Deputy Governor of the State Bank of Vietnam Dao Minh Tu affirmed: Interest rates continue to be managed stably in the direction of gradually reducing the general interest rate level in the economy; harmoniously managing interest rates and exchange rates in accordance with the market situation, macroeconomic developments and monetary policy objectives. Continuing to have solutions to encourage credit institutions to reduce costs to reduce the lending interest rate level, creating harmony between lending interest rates and mobilization interest rates; continuing to direct credit institutions to publicly announce average lending interest rates.

Actively manage credit growth to contribute to controlling inflation, stabilizing the macro economy, and supporting economic growth. Continue to direct credit institutions to grow credit safely, effectively, correctly, and on target, promptly meeting the capital needs of the economy, directing credit to production and business sectors, priority sectors, and growth drivers. Timely meet the highly seasonal capital needs for some key agricultural export products (rice, coffee, seafood, etc.).

Along with that, review to meet the credit capital demand for some important sectors and fields of the economy: real estate, transport infrastructure projects, industries such as cement, iron, steel, construction materials, etc.

Resolutely implement credit programs and policies under the direction of the Government and the Prime Minister, including the VND120 trillion credit program for social housing development; the VND30 trillion loan program for forestry and fishery; continue to strictly control credit in potentially risky areas; review and simplify loan procedures and records, creating favorable conditions for businesses and people to access bank credit; expand credit for production and business, serving life and consumption, contributing to limiting "black credit", Deputy Governor Dao Minh Tu stated.

VOV.VN - Credit growth has been negative for two consecutive months since the beginning of the year, while deposits remain very large, businesses still complain of lack of capital and difficulty in accessing credit capital...

Source: https://vov.vn/kinh-te/dieu-hanh-tin-dung-6-thang-cuoi-nam-2024-giam-mat-bang-lai-suat-cho-vay-post1102535.vov