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Economic News

Last updated: Tuesday, September 26, 2017

 

Vietnam Seeks to Further Lower Banks' Lending Rates to Support Businesses

Posted: Tuesday, September 12, 2017

Vietnamese government Tuesday said it will seek to further lower commercial banks’ lending interest rates while speeding up spending on pubic-funded projects and refraining from raising fees to support business activities.

Prime Minister Nguyen Xuan Phuc has told the State Bank of Vietnam, the country’s central bank, to take measures to cut commercial lending rates by 0.5 percentage points by the end of the year, with a target for a credit growth of 21% for the year, the government said in a statement.

Vietnam often relies heavily on bank loans and state budget spending for economic growth. The country targets a growth of 6.7% this year, compared with an expansion of 6.21% last year.

“The government has tasked the State Bank of Vietnam to pursue a flexible monetary policy, conforming to the macroeconomic, inflation and the monetary market conditions,” the government said.

The government has also asked the central bank to tighten vigilance over credit violations to ensure the safety of the financial system.

It also asked the Ministry of Planning and Investment and the Ministry of Finance as well as other agencies to lift any barriers hindering the disbursement of state budget spending on state-funded projects.

The Finance Ministry will need to carefully calculate the possible impacts of a proposed hike in the value added tax on the economy, the government said. The ministry earlier this year proposed raising value added tax to 12% from 10%, effective from 2019.

Meanwhile, the government said Vietnam won’t raise any taxes and fees this year to support businesses.

It said the country will continue its efforts to restructure and privatize state-owned enterprises and quickly deal with state-owned companies and projects that have been suffering from prolonged losses.

VGP








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