Viet Nam News
HÀ NỘI — The State Bank of Việt Nam (SBV) had set a credit growth target for 2019 equivalent at 14 per cent, said SBV Deputy Governor Nguyễn Thị Hồng.
“Credit would focus on priority fields ensuring risk control and supporting economic growth,” she said at a press conference in Hà Nội on Monday.
In 2018, the SBV implemented monetary policies to stabilise the currency and foreign exchange markets and contributing to controlling inflation at 3.54 per cent (the fifth consecutive year when inflation was curbed below 4 per cent) and supporting economic growth at 7.08 per cent – the highest level in the past 11 years.
Director of the SBV Department of Monetary Policy Phạm Thanh Hà said that the restructuring of credit institutions and settlement of bad debt had made positive changes. As of December 2018, the credit institution had handled VNĐ149.22 trillion (US$6.4 billion) in bad debt, he noted.
SBV’s Department of Payments Director Phạm Tiến Dũng said 76 credit organisations had already provided online payment services, while 41 were offering mobile services.
SBV Deputy Governor Hồng said the central bank would continue adopting flexible monetary, fiscal, and macroeconomic policies to keep inflation under 4 per cent again this year.
“The bank will keep a close watch on the developments of the macroeconomy, as well as domestic and international financial and monetary markets; while monitoring monetary policy instruments in a proactive and prudent way to stabilise the currency and foreign exchange markets,” she said.
In addition, the SBV would continue to set credit growth limits for each bank depending on its health to regulate overall credit growth and to support government targets.
We would focus on quality of credit growth this year. The central bank would regularly require banks to submit their reports on credit quality. We would directly work with credit institutions to control risks if it is needed. SBV required banks to enhance check-ups on internal process and implementation in lending activities,” she said. It will actively implement measures to limit dollarisation in the country and increase public confidence in Vietnamese đồng, thus contributing to stabilising the foreign currency and macroeconomic markets.The SBV will direct credit institutions to increase the quality of credit packages, focusing on the Government’s priority business fields, and enabling businesses and locals to access credit capital. It will improve a legal framework to support bad debt settlement and the reshuffle of credit organisations, Hồng added.
Stable interest rate
Answering questions about rising interest rates, the deputy governor acknowledged that interest rates had increased in some banks due to increasing capital needs of organisations and individuals.
She said credit institutions could still meet the needs of the economy while controlling interest rates.
“Interest rates decreased at the beginning of the year and increased at the end of the year to ensure liquidity. Interest only increased slightly over the course of the year.”
“The State Bank will closely monitor fluctuations in the market and external impacts, especially the FED’s rate hike schedule to take appropriate policies for exchange and interest rates,” she said.
In 2018, the central exchange rate increased by 1.6 per cent while the market exchange rate increased by about 2.5 per cent.
The system’s bad debt ratio fell sharply in 2018 to VNĐ149.22 trillion. The internal bad debt ratio of the credit institution system was 1.89 per cent, down from the level 2.46 per cent at the end of 2016 and 1.99 per cent at the end of 2017.
The rate was also the lowest level recorded since 2012. — VNS