Governor of the State Bank of Vietnam Nguyen Thi Hong has sent the latest report to National Assembly deputies explaining a number of contents related to the group of questions at the 8th Session of the 15th National Assembly.
The question and answer session with Governor of the State Bank of Vietnam Nguyen Thi Hong and the two Ministers of Health and Information and Communications will take place on November 11 and 12, 2024.
Regarding credit growth management, the Governor of the State Bank said that this agency has contributed to controlling inflation in line with the set target, contributing to consolidating the foundation of macroeconomic stability and ensuring major balances of the economy.
Along with that, the currency and foreign exchange markets are stable, and the credit institution system operates safely after an unprecedented mass withdrawal incident in history.
Interest rates will decrease by about 2.5% in 2023 and continue to decrease in the first 10 months of 2024 (average lending interest rates in 2023 will decrease by more than 2.5%/year compared to the end of 2022; by October 20, 2024, they will continue to decrease by 0.76%/year compared to the end of 2023).
However, according to Ms. Nguyen Thi Hong, since the 3rd Session (May 2022), the State Bank has reported to the National Assembly the difficulties and challenges in managing credit policy and up to now this policy continues to face pressure.
The Governor of the State Bank of Vietnam said that implementing the policy of continuing to reduce interest rates in the coming time will be very difficult. The reason is that lending interest rates have tended to decrease sharply in recent times.
Furthermore, the demand for credit capital is continuing to increase, which will also put pressure on interest rates in the coming time.
Exchange rate pressure from the international market causes the reduction of VND interest rates to increase pressure on the domestic exchange rate and foreign exchange market.
Another issue raised by Ms. Nguyen Thi Hong in the report is the difficulty when inflation reduction is not sustainable and there is a potential risk of increasing pressure in the context of the large openness of Vietnam's economy; World commodity prices fluctuate due to the impact of complex geopolitical developments; Increasing trends in food security in countries, extreme weather.
At the same time, the pressure on capital supply from the credit institution system for the economy is still large, including medium and long-term capital in the context of capital mobilization from the corporate bond and securities markets facing many difficulties. This poses a great risk of maturity and liquidity for the banking system (short-term mobilization for medium and long-term lending).
The credit absorption capacity of enterprises and people is still low. The trend of tightening and cutting spending by people also leads to low credit demand.
Some customer groups have credit needs but have not met the loan conditions or disbursed loans due to problems with project legal procedures, reduced financial capacity, cash flow imbalance, and lack of feasible production and business plans.
