Credit growth plummeted due to the impact of COVID-19 pandemic
At a press conference held on the afternoon of June 5, Deputy Governor of State Bank of Vietnam Nguyen Thi Hong said that due to the impact of COVID-19 pandemic, credit demand increased slowly. As of May 29, the credit increased by only 1.96% compared to the end of 2019.
Thus, compared to the same period in 2019, credit growth this year is much lower (in the first five months of 2019, credit growth of 5.74%) and still very far from the credit growth target of 14% in 2020.
According to the representative of the State Bank of Vietnam, credit continues to focus on production and business sectors and priority areas such as: credit for export increased by 4.94%; credit for high-tech enterprises increased by 2.92%; credit for supporting industry increased by 2.27%, etc.
Credit programs under the direction of the Government have been continuously implemented by credit institutions, and the capital demand for key projects has been promptly met. Credit for high-risk sectors is strictly controlled, in line with the orientation of the State Bank.
The State Bank of Vietnam continued to promptly implement solutions to resolve difficulties that affect production and business, especially in agriculture affected by natural disasters and epidemics such as: dead pepper plants in the Central Highlands region, African swine fever, drought, saltwater intrusion in the Mekong Delta region, etc. to help customers continue to maintain production and business.
The Deputy Governor of the State Bank said that the relevant departments were assigned to review, analyze and, if necessary, adjust the credit growth target. The State Bank will continue to focus the capital on business areas, priority areas.
According to Ms. Ha Thu Giang, Deputy Director of Credit Department of Economic sectors (State Bank of Vietnam), as of May 25, the banking system has restructured the repayment period for nearly 224,000 customers with outstanding loans of nearly VND 152,000 billion; exempted, reduced, lowered interest rates for more than 326,000 customers with outstanding loans of over VND 1.14 million billion.
In addition, new loans with preferential interest rates with cumulative turnover from January 23 to date reached VND 767,607 billion with 196,369 customers, with interest rates 0.5 - 2.5% lower than the pre-Covid-19 period.
Regarding the interest rate reduction, since the beginning of 2020, the State Bank has adjusted to reduce the policy interest rates twice, with a total reduction of 1.0 - 1.5% p.a. to support liquidity for credit institutions, creating favorable conditions for credit institutions to access low-cost capital from the State Bank; decreased by 0.6% - 0.75% p.a. on deposit interest rate for terms of less than 6 months and reduced by 1% p.a. for short-term lending interest rate for priority areas (currently at 5.0 % p.a.) to assist in reducing borrowing costs of businesses and people. Accordingly, the market interest rates tend to decrease compared to the beginning of the year.
Deputy Governor of the State Bank Nguyen Thi Hong said that the State Bank will adjust the policy interest rate based on the general economic context, especially inflation.
- The State Bank of Vietnam continued to reduce policy interest rates
- The State Bank and enterprises join hands to promote cashless payments
- Credit growth plummeted due to the impact of COVID-19 pandemic
- Controlling inflation is a top priority
- More positive forecasts about exchange rate stability in 2020
- SBV tightened information security in banking operations
- Helping businesses access capital more easily but not by lowering lending standards
- BVSC: Interest rates are likely to move sideways in the near term
- Digital banking and electronic payment are set to boom in the time of Covid-19
- Non-cash payments have recorded positive changes