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Vietnam’s central bank asked to ensure sufficient credit supply

HANOI (XINHUA) – Vietnamese Prime Minister Pham Minh Chinh has asked the State Bank of Vietnam (SBV) to ensure sufficient credit supply in the remainder of this year, Vietnam News Agency reported yesterday.

The prime minister ordered the central bank to urgently review the credit supply of credit institutions and each sector, and take measures to manage credit growth for 2023 in a timely, effective and feasible manner.

The order was made in the context of the low capital absorption rate of businesses and the entire economy.

The impacts of economic slowdown and high risk level from enterprises made it difficult for credit institutions in Vietnam to increase lending because the credit standard could not be lowered to ensure system safety and prevent bad debt from increasing again, according to the SBV’s credit department. It was forecast that Vietnam’s credit growth in 2023 will reach only 12 per cent as lending to the real estate sector, which accounted for 70 per cent of total banking sector lending, was struggling.

Low demand for borrowing also resulted from difficulties in business and production.

Vietnam recorded over VND12.8 quadrillion (USD528 billion) in credit as of the end of October.

Vietnam Prime Minister Pham Minh Chinh. PHOTO: XINHUA