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Bank credit flowing into realty, not manufacturing
Credit growth data shows that capital is flowing into the property sector, not manufacturing, a senior central bank official has said.
Credit growth rose 3 percent in December 2011 and 1.7 percent in January, Deputy Governor Tran Anh Tuan told Tuoi Tre on the sidelines of a meeting between the State Bank of Vietnam and commercial banks.
Interest rates have topped 20 percent at some banks but he said efforts will be made to lower them and redirect lending to the production sector.
The rates could start declining in the third quarter since curbing inflation is a priority this year, but he said the SBV will provide businesses support before that.
A series of supportive policies is expected to be announced today by SBV Governor Nguyen Van Giau.
The government hopes to cap credit growth at 20 percent this year, but coordinating many banks to achieve the target is expected to be a difficult task.
Tuan admitted that the penalties slapped on small banks for hiking deposit interest rates above the cap of 14 percent are not as severe as they ought to be.
But bankers said at the meeting that the cap is inappropriate at a time when fighting inflation is a priority.
They asked the central bank to pump more dollars into the system to stabilize it, but Tuan said instead that commercial banks should do that, reducing their forex holdings.
The dong’s devaluation on February 11 saw banks’ ratio of dollar purchases/sales plummet from 1.58 percent to minus 1.18 percent, indicating that they have directed the greenback into the market, Tuan added.
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