5:30:00 PM | 4/11/2008
Vietnamese businesses are now reluctant to borrow loans from commercial banks, which have recently reported a total capital of VND50 trillion surplus, due to high interest rates.
Domestic commercial banks are currently offering a real lending interest rate at 19 per cent-21 per cent per annum despite base rate cut by the central bank to 13 per cent and massive deposit rate drops by commercial banks to 16 per cent.
Commercial banks are unwilling to loan clients due to worries about little recovery possibility and high growth rate of bad debts, meanwhile, local businesses, particularly small and medium ones are thirty for, said Le Xuan Nghia, head of the State Bank of Vietnam's Banking Development Strategy.
In order to escape from the vicious circle, Nghia suggested commercial banks to continue their lending.
According to the General Statistics Office, the consumer price index (CPI) decreased by 0.19 per cent in October, which reflected the decreased purchasing power, and thus lower consumption.
Duong Kim Thoa from Dong Hai Automobile Company said that the demand for cars in Jan-Oct decreased by 50 per cent over the same period of last year, and automobile companies are now struggling to survive.
Nguyen Manh Hung from Viettel Telecommunications Company said that customers nowadays have to cut spending and limit the numbers of calls they make, which means that the plan to increase the number of subscribers will be affected and turnover will decrease.
Meanwhile, analysts say that the purchasing power of materials has decreased by 30 per cent-60 per cent, and forecast that material prices will further decrease amid the big difficulties in the world.
The slow sale of products explains why many businesses are not interested in borrowing money at this moment. Meanwhile, other businesses do not want loans now because they hope interest rates will drop further. (Labor)
Vietnamese
