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Enterprises call for lower interest rates, delay in electricity price rises
Vietnamese exporters have put forth these proposals with regard to the country’s export goals for 2009.
“Now is not an appropriate time to raise electricity prices,” said Le Quoc An, President of the Management Board of the Vietnam Textile and Garment Group (Vinatex). He stressed that many traditional export markets for all industrial goods have stopped ordering, while new markets pose many obstacles due to the import tax policies of other nations.
In his analysis, textile and garment enterprises are facing a high rate of unemployment, and an increase in power prices will add to that burden.
Nguyen Huu Dung, Vice President of the Vietnam Association of Seafood Exporters and Producers (VASEP), agreed with Mr An on this. He said that a rise in power prices would not offset other government assistance for enterprises, such as low interest rates and reduced taxes.
In addition, many enterprises and their associations suggest that the State Bank of Vietnam continue to reduce its prime interest rates so that commercial banks will lower their loan interest rates. They said the current ceiling lending rate of 12.75 percent is too high compared with other nations, which causes huge difficulties for business activities. They added that many of them have had to borrow capital with interest rates of 18-21 percent.
Fielding questions about the issue, Nguyen Danh Trong, a monetary official from the State Bank of Vietnam, explained that the interest rate offered by the central bank in many other countries is often very low or even nearly 0 percent. This is the rate at which the central bank lends to commercial banks. When lending capital to enterprises, the banks will raise the rate to 6 or 7 percent on account of ‘banking costs'.
Mr. Trong added that the State Bank has submitted to the government ways to implement the demand-stimulus package worth VND17 trillion. Accordingly, enterprises are expected to receive an interest rate reduction of four percent but only once they have paid their outstanding debts to the banks.
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