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About VND 705,000 billion of credit was "poured" into the economy over four months

01/05/2022

With great demand, credit growth as of April 25 has increased by 6.75%, equivalent to about VND 705,000 billion that has been "poured" into the economy in the first four months of this year.

At the recent Government meeting, Governor of the State Bank (SBV) Nguyen Thi Hong informed that credit accelerated significantly in March and April. Credit growth as of April 25 reached 6.75 % compared to the end of 2021 shows the great credit demand of the economy in the context of a strong recovery.

Previously, at the beginning of April, a representative of the State Bank of Vietnam said that credit grew by 5.04%, meaning that in less than a month, credit has increased by more than 1.7%. In the first quarter of 2021, credit growth was at only 2.16%.

In Ho Chi Minh City, it is estimated that as of the end of April 2022, the total outstanding loans reached over VND 3 million billion, an increase of about 7% compared to the end of 2021. This is the highest growth rate compared to the same period many years ago.

In 2022, the SBV sets a credit growth target of 14%, but with adjustments depending on the economic situation. However, the current high and rapid credit growth is still confirmed by the SBV to continue to monitor and adjust to be in line with the monetary, macroeconomic and inflationary policy management objectives.

Therefore, Governor Nguyen Thi Hong emphasized that the economy's huge credit demand poses a problem for the SBV in terms of monetary policy management in the last months of the year, while meeting the credit needs of the economy, while not being subjective with inflation, maintaining macroeconomic stability.

According to experts at Rong Viet Securities Company (VDSC), credit growth of the whole system as of the end of April 2022 is estimated to increase by over 16% over the same period, 2 percentage points higher than the full year growth target of 14%. Although lending activities to risk areas such as securities and real estate are being tightened, the effect from the recent tightening of corporate bond issuance will cause borrowing pressure to shift to the banking system, pushing credit growth higher this year.

On the contrary, experts of SSI Securities Company said that credit growth has somewhat slowed down in the context that the Government and the State Bank have taken tough actions on the corporate bond and real estate markets. Meanwhile, the liquidity in the stock market slowed down and the deposit interest rate inched up, helping to increase the personal cash flow deposited in the bank.

 

Kylie Nguyen

© 2019 Vietnam Bank for Agriculture and Rural Development No. 2 Lang Ha street, Ba Dinh district, Hanoi, Vietnam
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