Nguyen Van Giau, the Governor of the State Bank of Vietnam, the country’s central bank, has said in an interview with reporters of Banking Times that the SBV has asked the government to raise the cap on credit growth to 30 per cent this year, up from the initially targeted cap of 21 per cent-23 per cent.
The SBV made the bold proposal after seeing a slow-down in capital flows in the domestic economy in the first months of the year, under impacts of the global recession, Governor Giau said.
Total loans by local banks in Vietnam’s economy have climbed 14.01 per cent since early 2009, and are forecast to grow 17 per cent in the rest of the year, Giau noted.
“The SBV will adopt flexible but cautious monetary policies to help maintain the country’s economic growth and tame inflation at 6 per cent-7 per cent and curb the trade gap at about US$10 billion this year,” Giau emphasized.
Currently, non-performing loans by the banking system in Vietnam are at a secure level, reaching 2.62 per cent of the total outstanding loans at the end of April, compared with 2.17 per cent in early 2009, the governor assured.
So far this month, banks lent a total of VND151 trillion to the realty sector by the end of May, up 9 per cent from early 2009, while they lent VND7.2 trillion for stock transactions, up 4 per cent and lent VND85 trillion to individual consumers, up 11.6 per cent, he added.
“By the end of May, the SBV had used up to 43 per cent of the banknote quota that the government allows to print for the full-year of 2009,” Giau said.
The government has asked the National Assembly, the top legislation body, to lower the GDP growth target to 5 per cent this year, state media said. (Banking Times)
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