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In an interview with the Vietnam Economic Forum 2024 organized by the Lao Dong Newspaper on the morning of April 25, Deputy Governor of the State Bank of Vietnam Dao Minh Tu said that in order to support exports, besides capital, there are many other issues, including exchange rates and other policy mechanisms.
From the perspective of the State Bank of Vietnam, the problem is how to maintain interest rates as they are now, keeping exchange rates stable. These are the two most important factors, especially for import-export businesses; coupled with the very best credit conditions and maximum capital.
According to Mr. Tu, monetary policy management and banking operations in the first 3 months of the year, and now nearing the end of April, have been very difficult, in the context of a very large impact on the economic situation both internationally and the internal difficulties of the economy, and at times even more difficult.
Credit in the first 2 months of the year was negative, unable to grow, even though the mechanism, apparatus, and policies remained the same. Demand for credit is naught, demand for investment and consumption is low when enterprises are still struggling. Businesses have also faced many difficulties, orders have increased, but prices have increased significantly. By March and now, some localities have increased quite a lot, progressively and currently credit growth is at about 1.5%.
At present, along with monetary policy, other support policies from the Government and ministries and sectors are also being actively implemented to stimulate investment demand, consumer demand, and credit demand.
On the issue of capital, Mr. Tu said that the liquidity of commercial banks is still ample. If enterprises have effective projects that meet the minimum credit conditions, they will definitely be granted loans. Right from the beginning of the year, the State Bank of Vietnam has proactively taken measures to set credit limits for commercial banks. Accordingly, the target credit growth this year will be 15%, and if necessary and macroeconomic indicators allow, it will be increased further.
Interest rates are currently at their lowest in decades, especially for new loans. According to the Deputy Governor, interest rate management requires prudence, as it is related to exchange rate policy. Therefore, the State Bank of Vietnam takes the view that interest rates should be lowered, but they must be in line with the macroeconomic context and inflationary pressures.
“The State Bank of Vietnam affirms that it has not yet put the issue of adjusting interest rates, whether raising or lowering them, on the agenda, but rather will maintain the current policy rates and encourage commercial banks to lower lending rates, especially in priority sectors,” Mr. Tu emphasized.
Regarding the policy of extending and deferring debts, the Deputy Governor said that Circular 02 will be extended to the end of this year instead of just to June 30. In addition, commercial banks will continue to implement preferential lending packages, creating preferential capital sources for businesses.
The State Bank of Vietnam is also directing commercial banks to apply technology to reduce costs for businesses. This is an urgent factor. In addition, banks are also promoting consumer credit to address consumer demand and inventory right in the domestic market. At the same time, they are actively promoting the connection between banks and businesses, with Ho Chi Minh City being the pioneer.
