Foreign currency loans increase sharply

Credit growth rate of Ho Chi Minh City rose 15.57 percent at the end of October, 2017 compared to the end of 2016, being higher 2 percent than the country’s average credit growth rate, reported Vice Director of the State Bank in Ho Chi Minh City Nguyen Hoang Minh. 

(Illustrative photo:SGGP)

(Illustrative photo:SGGP)

Of the number, loans in foreign currencies increased sharply at 15.38 percent. Debit balance in foreign currency loans in the first ten months of the year hiked 16 percent, being approximately loans in Vietnamese dong.

The reason is due to the stable exchange rates and low interest rates (lower than 3 percent of loans in VND a year), so businesses took advantage of the foreign currency loans to reduce costs.

Similarly, the country’s foreign currency loans also were up 11.5 percent in the first ten months of 2017 compared to the end of 2016. 

According to the National Financial Supervisory Commission, the main reason is also due to the import demand being higher than to last year.

According to circular of the State Bank, the foreign currency loans will be invalid by the end of 2017. So, the businesses will not be able to borrow foreign currency loans from the beginning of 2018 if they do not continue to be extended.

BY HANH NHUNG- Translated by Huyen Huong

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