The State Bank of Vietnam (SBV) on November 6 reported that till the end of October credit growth was up to 33.29 percent.
In comparison with previous month, the dong deposit rate band increased slightly by 0.1-0.3 percent/year to commonly at 8.0-10 percent per year. The dong lending rate was stable at 10-10.5 percent/year (the lending rate under the lending rate subsidisation programme was 4.5-6 percent per year).
The deposit rate of US dollar also rose commonly at 1.3-3.5 percent against previous month. The lending rate of US dollar was relatively stable at around 3.5 percent pa.
The negotiation lending rate at credit institutions was commonly at 14-16.5 percent/year.
SBV said that in October, the supply and demand of foreign currency showed positive movements. The forex rate was always at the allowable ceiling rate.
Total payment measures in October were estimated to grow by 1.52 percent month on month and jump by 23.99 percent against last December. Of which, the cash flow outside the banking system was estimated to reduce 0.34 percent m-o-m and up 14.88 percent year-on-year.
Total deposits of customers at credit institutions in October were estimated to grow 1.85 percent m-o-m and up 25.72 percent y-o-y. Of which, deposit balance in dong increased by 2.07 percent and deposit balance in foreign currency jumped by 1 percent compared to previous month.
As for lending activities, credit for economy in October was estimated to increase by 2.04 percent against last month and rise by 33.29 percent from last December. In which, credit in dong increased 2.03 percent and credit in foreign currency grew by 2.06 percent m-o-m.
In a recent analysis on the impacts of credit growth to the stock market, Nguyen Ho Nam – general director of Sacombank Securities Co said that one of the problems that are causing fears for many investors now perhaps is the rumour about the credit growth exceeding 30 percent, and the central bank would launch measures to tighten credit in order to “protect” this target.
The analysis showed that strong credit growth recently was due to impacts from 4 percent subsidised lending rate package.
Therefore, lending rate expense became extremely low; leading to businesses pushed up borrowing working capital and quickly increased the balance of soft loan up to 400 trillion dong over the banking system.
However, these are short-term loans so outstanding loans of banking system will be able to fall by December 2009. Thus, corporate lending activities would still continue to be brisk by the end of the year.