Credit growth outpaces the growth of total means of payment

25-Sep-2018 Intellasia | Tri Thuc Tre | 6:00 AM Print This Post

The stronger growth of credit against the growth of the total means of payment has just recorded since the beginning of July until now, when the State Bank of Vietnam (SBV) actively and partly withdrew liquidity from the banking system in order to reduce the pressure on the exchange rate.

The report summarising the implementation results of Resolution 01/NQ-CP and the socio-economic situation in August and in the first eight months of the year showed that the credit growth in the first eight months of the year reached 8.18 percent. This is the lowest growth rate of the outstanding credit in the recent three years, as it was 10.8 percent in the same period of 2017, 9.64 percent in 2016 and 10.21 percent in 2015; also far from the annual growth rate of 17 percent.

Meanwhile, information from the SBV pointed out that as of August 22nd 2018, the total means of payment increased by 8.3 percent, mobilisation grew by 8.72 percent, and lending to the economy increased by 8.54 percent compared to the end of 2017.

According to experts of Bao Viet Securities Company (BVSC), the faster growth of credit compared to that of total means of payment has only started from early July until now. Accordingly, the difference between the increase of M2 and the increase of credit has fallen from 238 trillion dong as of June 20th 2018 to only 124 trillion dong as of August 22nd 2018.

Concerning inflation, the Consumer Price Index (CPI) in August slightly increased by 0.45 percent compared to July, bringing the average CPI in the first eight months of the year to 3.52 percent compared to the same period of last year, closely following the target of controlling inflation below four percent of the government.

BVSC’s experts believed that the risk of inflation in the last four months of 2018 is still fairly unpredictable, especially when the domestic pork prices and the world oil prices remain high. Therefore, the monetary policy orientation of the SBV will continue to follow a prudent but flexible direction, depending on the actual movements of inflation as well as the capital demand of the economy.


Category: Finance, Vietnam

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