Vietnam will continue tightening policy in 2012 and the targets of credit growth and money supply are likely to be capped at 17 percent and 16 percent respectively, the lowest level in 15 years, the state-run newspaper VnEconomy reported, citing its private source
If this source is correct, the year 2012 will see second consecutive tightening monetary policy of around 15 years low since a growth of 16.4 percent in 1998. History showed that from 2003-2010, lending growth always stood at high level, peaking in 2007 with 53.9 percent growth before slowing down to 29.8 percent in 2010 and is targeted at 17 percent this year according to latest adjustment after a 9.5 percent credit growth in 9M2011 or 11.7 percent all kinds of lending included, central bank’s data showed.
Of note, manufacturers, exporters, agriculture producers will be prioritised to access loans from banks, and lending to non production areas will be strictly controlled in 2012.
The central bank governor, Nguyen Van Binh, said in a recent forum that despite lower credit growth this year, but Vietnam has become more efficient in its use of capital and the loans-to-GDP ratio has reduced to 1.2-1.3 percent from previous 1.6-1.7 percent.
Cao Sy Kiem, former governor, said credit growth does not mean easing monetary policy with higher injected liquidity, but it should be where to pump water to”.
Nguyen Duc Vinh, CEO of Techcombank said banks will be more selective in providing loans, focusing on high efficient capital use sectors to boost economic growth. The lender will be more cautious with non-production areas such as property and will charge higher lending rates.