At the regular government press conference in the afternoon of September 06, 2022, Mr. Dao Minh Tu, First Deputy Governor of the State Bank of Vietnam (SBV), emphasized that the most important goals are still to control the inflation, maintain the macroeconomic stability, and support the economic recovery.
SBV Deputy Governor Dao Minh Tu speaks at the press conference.
Regarding the interest rate management, the SBV Deputy Governor informed that, in the current context, many central banks around the world, including the most developed countries, have raised their key interest rates to limit investments in order to curb the inflation. In Vietnam, inflation receives a lot of attention. The government has initiated multiple measures to prevent inflation. During July and August, the inflation rate continued to be maintained at a low level of 2.58%. However, it is still critical to maintain strict control of the monetary factors, as well as some other elements. Therefore, for the time being, the SBV’s interest rate management must be calculated thoroughly and with great caution.
In 2021 and the first months of 2022, many central banks around the world had raised their key interest rates to very high levels, but the SBV has still maintained the key interest rates at a stable level. Putting this in the relative comparison with other countries where the key interest had been on a rise, it could be deemed that Vietnam had decreased its key interest rates, although the absolute numbers have not changed. This has created favorable conditions for the commercial banks to access capital at reasonable and more affordable prices. In the coming time, the SBV would continue to operate the key interest rates in a flexible manner to achieve the goal of controlling the inflation.
Over the past months, the interest rates at the commercial banks have increased, but with very slight levels: the average deposit interest rate has increased by 0.25%, and the average lending interest rate has risen by 0.24% - these are the lowest increases compared with those of all other countries in Southeast Asia and Asia; the average lending interest rates are currently between 7.9 to 9.3%, applicable to both existing outstandings and new loans; the average mobilization interest rates range from 6.3 to 6.8% for 1-year plus terms. Compared with those of the recent years, these interest rates have been quite stable.
The SBV would continue to call on the commercial banks to take measures with their own resources to continue to support the businesses, just as they have done for the past two years with the COVID-19 support packages (e.g. the 52 trillion VND package for the interest rate reduction to support businesses). In the coming time, implementing the directions of the Government, the SBV would continue to call on the commercial banks to cut down on their operating costs and spend part of their profits to further support businesses in accessing banks’ loans.
Relating to the credit limits, SBV Deputy Governor Dao Minh Tu emphasized that, on the basis of the target of maintaining the inflation rate below 4% and achieving a GDP growth of 6 to 6.5% as adopted by the National Assembly, the SBV had set a credit growth target of 14% from the beginning of the year, with certain flexibility in its management depending on the practical situation.
From the very beginning of the year, the SBV had assigned the credit growth limits to every credit institution. By now, the credit growth has reached 9.91%, which is much higher than the same period last year. The credit institutions have used up their credit room as assigned at the beginning of the year. For the remaining credit limits, the SBV would allocate to the banks and credit institutions that have been functioning well and healthily with high safety ratios.
LK