Central bank must ensure sufficient credit for economy: Vietnam PM

The State Bank of Vietnam (SBV) must ensure sufficient provision of credit for the economy and the safety of the credit institution system, while avoiding congestion in capital flows, said Prime Minister Pham Minh Chinh.

In a dispatch sent to the SBV on the management of credit growth in the last months of 2023, the cabinet leader requested the central bank to urgently review the credit supply of credit institutions for the economy and each sector.

“The SBV needs to review credit supply at each credit institution and commercial bank and take measures to manage credit growth for 2023 in a timely, effective and feasible manner,” he noted.

According to the dispatch, the government had requested the SBV to determine the reasonable credit growth limit for 2023, and allocate all credit quotas and publicize them in June so that credit institutions could proactively expand credit rooms until the year-end.

In particular, attention should be paid to providing credit for real estate and production and business activities to support the market, contributing to restoring and unleashing capital flows into the economy, according to the resolution.

The SBV must learn from its slow credit growth management in 2022, and promptly report to competent authorities any issues that go beyond its authority according to regulations, the prime minister noted.

The government head also asked the SBV to report the credit situation before December 1, and assigned Deputy Prime Minister Le Minh Khai to monitor, direct, inspect and urge the implementation of this task.

The SBV set a credit growth target of 14% for the whole year and allocated credit quotas to all credit institutions in the system by the middle of the year, said SBV governor Nguyen Thi Hong while responding to legislators at a November 2 discussion on the socio-economic situation as part of the National Assembly’s ongoing session.

It has made four policy interest rate cuts to bring rates on new loans down by about 2 percentage points compared to the end of last year, she said, noting that despite great efforts, as of October 27, credit had increased by only 7.1% compared to the end of 2022.