At the Monetary Policy Implementation Conference for 2024 held on March 14, the Chairman of PVN emphasized the significant role of monetary policy management, particularly in the context of Vietnam’s credit-to-GDP ratio being one of the highest in the world.
He revealed the asset structure and debt structure of PVN, especially credit, which is currently around 240,000 trillion VND.
 Mr. Le Manh Hung, Chairman of PVN’s BOM, believes that a rational and optimal monetary policy will be a crucial motivation for production, business, and investment. Photo VGP/Nhat Bac
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“If the interest rate increases by 1%, PVN’s capital cost will rise to about 2.4 thousand trillion VND per year. Therefore, restructuring capital and financing in business operations, especially in PVN’s investment projects, is very important, helping to reduce the average capital utilization cost in each project, similar to the investment project of Nghi Son Refinery and Petrochemical Complex that the Prime Minister directly instructed in restructuring the borrowing capital from credit institutions and banks worldwide,” said Le Manh Hung.
Currently, PVN is in the process of negotiating with banks to restructure these loans with new loans at lower average capital costs, optimizing production and business costs to overcome difficulties.
“This is also one of the lessons learned by the Chemical Corporation and Vinatex in difficult contexts. In difficult market conditions, when businesses use large financial leverage, we need to apply models such as profit before interest, taxes, and depreciation to balance and calculate production, business costs, including financial costs, through restructuring capital sources for businesses,” Mr. Hung commented.
According to him, in the coming time, in the 2021-2025 plan, PVN plans to mobilize approximately 250.3 thousand trillion VND from credit for development investment.
“With the sensitivity of the interest rate on PVN’s capital utilization costs, we sincerely hope that the Government and the State Bank of Vietnam will continue to maintain an optimal and stable interest rate policy to avoid affecting the production, business, and investment activities of the Corporation and businesses in general,” he said.
Regarding foreign currency loans, Mr. Hung said that PVN’s foreign currency borrowings are 38,000 trillion VND (1.5 billion USD). He believes that exchange rate fluctuations and risks have a significant impact on the Corporation’s production and business activities, especially in risk management.
“We are delighted that recently, the State Bank of Vietnam has managed to stabilize the exchange rate, helping businesses minimize the impact of exchange rate fluctuations. We sincerely hope that in the future, the State Bank of Vietnam will have solutions to keep the exchange rate stable,” he said.
Regarding loan policies, PVN’s projects have large investment scales and loan volumes, such as the Nghi Son Refinery and Petrochemical Complex with nearly 5 billion USD. “If there are loan policies and support for domestic credit institutions, especially the 4 major State commercial banks, as currently, capacity will improve significantly compared to before,” Mr. Hung commented. In addition, he believes that if the Government and the State Bank of Vietnam have policies to support banks, especially considering each case, increasing the lending limit for large corporations and projects, it can support these institutions in accessing and using domestic credit.
PVN believes that with a rational and optimal monetary policy, it will be a significant driver for key indicators, including production, business, and investment, especially for businesses that use significant financial leverage from the credit market, such as Petro Vietnam.
