Credit growth estimated at 14 percent in 2014

The State Bank of Vietnam estimates credit growth rate at 12-14 percent in 2014 and total money supply to rise by 16-18 percent, according to a press release on December 16 in Hanoi.

The State Bank will continue to keep the interest rate ceiling on dong deposits to stabilize interest rate levels in the market. However, when the currency market is steady and liquidity improves, the Central Bank will consider lifting the interest rate cap.

The bank will also keep close watch on exchange rates, and monetary and foreign exchange markets in order to adjust exchange rate appropriately and increase foreign currency reserves.

The State Bank will continue to keep the interest rate ceiling on dong deposits to stabilize interest rate levels in the market (Photo: XL)

By December 12, credit growth rate barely touched 8.83 percent while this year’s target was 12 percent. The ratio of loans extended for production and business, especially priority sectors, improved significantly. By the end of November 2013, credit for agriculture and rural sector climbed 17 percent, high-tech business surged 24.51 percent, and export inched up 3.32 percent.

Interest rate levels have dropped by 2-5 percent compared to those in the beginning of this year, returning the same levels as in the period 2005-2006.

Bad debts are also more in control. Total bad debts that have been settled in 2012 and the first ten months of 2013 reached VND105.9 trillion, of which Vietnam Asset Management Company (VAMC) bought nearly VND28.1 trillion worth of original debts from 26 credit institutions by December 16, 2013. VAMC expected to buy around VND30-35 trillion worth of bad debts this year.

In addition, around VND316.8 trillion worth of loans were restructured and maintained normal status by October 31, 2013.

As for the foreign currency market, exchange rate was kept steady this year, only edging up about 1 percent since the beginning of this year, much lower than the forecast of 2-3 percent.

By Bao Minh – Translated by Thuy Doan

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