Lending in Vietnam grows by 5.83%
Director of the State Bank of Vietnam (SBV)'s Monetary Policy Department, Nguyen Thi Hong, has said that the rise in lending is a positive sign for the economy, explaining that last year, the same period saw a growth rate of only 2.52 per cent.
Lending in Vietnamese dong rose 9.98 per cent, while lending in US dollars declined 13.05 per cent.
Deposits during the period surged 11.74 per cent, of which deposits in dong increased 11.63 per cent while US dollar deposits rose 12.43 per cent.
The central bank reported that the loan-to-deposit ratio (LDR) also declined slightly to 92.21 per cent from 93.7 per cent late last year.
Industry insiders predicted that deposit interest rates were unlikely to fall further, although commercial banks may decide to lower lending rates by 0.5-1 per cent for the rest of the year to boost lending growth at the year-end.
Recent months have seen banks launch a spate of preferential credit programmes for consumers and businesses. However, lending has remained low.
Many businesses suggest banks aggressively cut interest rates to balance supply and demand. The Prime Minister recently asked the central bank to operate interest rates in accordance with inflation to boost the economy.
Experts and some bank executives admitted it would be better if interest rates were further reduced, but also said that the interest rate was no longer a barrier to businesses, as lending rates were now the same as in the 2005-06 period.
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