|
Central bank targets 20 percent credit growth
Vietnam aims to keep credit growth in the banking system at around 20 percent next year, roughly on par with this year’s rate, as part of efforts to stave off an economic downturn, a central bank source said Tuesday.
“The main focus for the banking sector next year is to avoid an economic slowdown and to maintain growth,” said the official, who attended the central bank’s year-end policy meeting Tuesday. The official spoke on the condition of anonymity because he is not authorized to speak to the media.
Earlier, a central bank report estimated credit growth in 2008 to be 21-22 percent, well below the bank’s 30 percent cap after authorities earlier this year clamped down on lending to cool soaring inflation and a widening trade deficit.
Following a series of interest rate rises and a fall in global commodity prices, inflation has eased from a peak of 28.3 percent in August and the government has turned its focus to promoting growth as external conditions worsen.
Since late October, the central bank has tried to spur the economy by lowering interest rates and cutting the reserve requirement ratio, but some economists say banks remain reluctant to lend and many businesses are holding off on taking new loans.
Last year, the economy grew 8.5 percent, but this year it is estimated to have expanded 6.2 percent after being buffeted first by a flurry of initiatives to avoid severe overheating and later in the year by a sharp global economic slowdown.
The central bank next year would “closely control the quality of credit, and realize credit growth in line with the level of control over inflation,” the central bank’s statement said.
Total bad debts amount to about VND43.5 trillion (US$2.5 billion) this year, or 3.5 percent of outstanding loans, according to a statement released by the State Bank of Vietnam Tuesday.
On Monday, central bank governor Nguyen Van Giau forecast 2009 would be even more “challenging and difficult” for the economy as well as the banking sector because both savings and investment are expected to slow.
The government has cut its growth forecast for next year to 6-6.5 percent, while the International Monetary Fund is more pessimistic and sees growth slowing to 5 percent in 2009.
Reuters
|
