Vietnam’s 2024 credit growth target of 15% attainable: official

The State Bank of Vietnam (SBV), the country's central bank, is confident in achieving the credit growth target of 15% this year despite a sluggish start, SBV Deputy Governor Dao Minh Tu said, citing a more optimistic economic outlook.

To date, the banking system's credit growth has reached 7.75%, with a positive upward trend seen since April, Tu stated at the government’s regular meeting in Hanoi on Saturday.

At this time last year, the credit growth was 5.33%, but managed to end up the year at 13.71%, Tu noted, expecting this year’s credit growth to contribute to achieving the 2024 GDP growth target of 6.5-7%.

The banking regulator has given more freedom to credit institutions in lending by granting them the credit growth quotas right at the beginning of 2024 instead of doing so in tranches in the previous year.

Late last month, the SBV allowed banks that had their credit quotas 80% filled up to give loans beyond those limits, in dependence of their respective ratings.

Regarding interest rates, the SBV has devised measures for rate cuts step-by-step. Currently, the average lending interest rate stands at 6.23%, down by 0.86 percentage points from the end of 2023, while deposit rates average 3.84%, up by 0.23 percentage points.

The USD/VND exchange rate has remained stable, Tu said. So far, the Vietnamese dong (VND) has depreciated by 1.5% against the U.S. dollar, which is much lower compared to other currencies. "We will continue to maintain a stable and appropriate exchange rate to attract foreign investment," he emphasized.

Tu highlighted the system's adequacy of credit and liquidity to meet capital needs. The problem is whether businesses can absorb capital or not. The SBV will push commercial banks to facilitate easier access to capital for enterprises.

Regarding soft loan packages, he informed the SBV's intention to expand an existing package for fisheries export to VND50-60 trillion ($2.03-2.44 billion) as VND36 trillion ($1.46 billion) has been disbursed, surpassing the initial target of VND30 trillion.

Additionally, the social housing-focused credit package has been expanded to VND140 trillion ($5.7 billion) with the participation of four more banks from the previous VND120 trillion. The maximum interest rate will be further lowered by one percentage point and the term for homebuyers will be extended from five to 10 years to stimulate lending, he added.