SBV steps to limit US dollar credit growth

State Bank of Vietnam has requested commercial banks to restrict lending foreign currency, especially US dollar to import goods on the list of import restrictions in order to cool down pressure on exchange rates.

Tuoi Tre state-run Newspaper quoted Nguyen Hoang Minh, deputy director of the State Bank’s HCM City Branch as saying the ministry has issued the list of goods subject to import restrictions.

According to Minh, with this decision, in near future, the US dollar credit growth will not be heated up as it was in the past time.

According to figures from the SBV, the credit for the country’s economy in April 2010 was estimated to grow 1.73 percent over the previous month, in which dong loans rose 1.41 percent, loans in US dollar increased 3 percent. Credit for the economy was estimated to grow 5.58 percent year-on-year.

Latest weekly statistical publication released by the central bank, state-owned commercial banks have reduced lending rates by between about 1 percent per year for loans for production – business, and the rates for loans to agriculture – forestry – fisheries production development, exports and small and medium sized enterprises is now at 12.5 to 14 percent per year.

Currently, the loan rate at joint stock banks such as LienViet Bank, Asia Commercial Bank and An Binh Bank is standing at between 14 percent and 15 percent, down by 1-1.5 percent per year against the previous week.

According to the central bank’s publication, loan interest rates in US dollar now are commonly ranging from 5.5 percent to 8 percent per year.

The forex market is advancing steadily as US dollar supply-demand on the market is in a good balance, and the liquidity of US dollar remains high, said SBV.

 

Category: Finance