Interest rates might have hit the nadir and are unable to dip any
further in the future, while banks are still trying to boost lending in a bid
to unfreeze the credit flow.
This view was shared by analysts
and representatives of banks in the context that many businesses still need
capital but hesitate to take out loans for thinking that interest rates will
continue to drop.
“We think that interest rates are
arriving at the bottom and banks have become more aggressive in giving out
loans. Many banks told us they had been asked to boost lending, so it is
forecast that credit will grow well in the coming months,” said a report of HCM
City Securities Corporation (HSC).
The central bank governor has
recently said interest rates would not be slashed further and the deposit rate
ceiling of 15% would be kept unchanged in the next 12 months.
The latest figures show that
credit growth is inching up. Nguyen Xuan Dung, corporate client manager at
Vietnam International Bank (VIB), told the Daily that ten days after the launch
of the 1.5-trillion dong credit package with a lending rate of 12% per year for
the HCM City-based small and medium-sized enterprises, nearly 100 billion dong
worth of loans had been disbursed.
This program is carried out from
July 10 to December 31, with a minimum rate of 12% a year and the maximum rate
not exceeding 14%. VIB focuses on disbursing capital for businesses active in
the areas of import, export, manufacturing and processing.
According to local media, credit
in HCM City picked up 0.5% in July against June and 3% year-on-year, while in
Hanoi credit has risen 2.65% from the previous month.
Analysts at Bank for Investment
and Development of Vietnam (BIDV) said dong interest rates in the inter-bank
market remained low, around 4.5-5.5% for terms from overnight to one week, 5.5%
for 2-3 week terms, and 6-6.5% for one-month terms. Short-term loans of less
than one month made up 90% of the transaction volume.
Money supply remains plentiful
while there has not been any significant change in demand.
It is expected that the HCM City
government will hold more dialogue with banks and businesses tomorrow in order
to seek ways to bring choked off capital at banks into the economy. There have
been several meetings like this over the past quarter.
Saigon Times
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