Credit in July decreased slightly

According to the report of the State Bank of Vietnam (SBV), in the first 7 months of 2024, closely following the policies of the Party, the National Assembly, the Government, and the direction of the Prime Minister, the SBV has proactively followed domestic and foreign economic developments to synchronously deploy solutions to create favorable conditions for businesses and people to access bank credit, restore production and business, increase capital absorption capacity, promote growth associated with macroeconomic stability, control inflation, and ensure the safety of the credit institution system.

As of July 31, the central exchange rate was at 24,255 VND/USD, up 1.63% compared to the end of 2023, a low and stable average compared to currencies in the region and the world.

Interest rates for new and old loans continued to decrease. By the end of June 2024, the average lending interest rate was 8.3%/year, down 0.96% compared to the end of 2023; the average deposit interest rate was 3.59%/year, down 1.08%/year compared to the end of 2023.

Prime Minister Pham Minh Chinh at the working session

Credit growth of the whole system recovered from the end of March and gradually increased over the months, higher than the growth rate in the same period in 2023, reaching 6% by the end of the second quarter of 2024 according to the direction of the Government and the Prime Minister.

However, credit then decreased slightly. By the end of July 2024, outstanding credit was nearly VND 14.33 trillion, up 14.99% over the same period in 2023 and up 5.66% over the end of 2023.

The State Bank, ministries, sectors and localities coordinate to implement sectoral and sectoral credit programs such as: The VND120 trillion credit program for loans to develop social housing, worker housing, and apartment building renovation and reconstruction projects; and the credit program for the forestry and fishery sectors, with a cumulative total of VND34.4 trillion.

“Benefits are balanced, difficulties are shared”

Directing at the Conference, Prime Minister Pham Minh Chinh emphasized that monetary policy management and banking system operations still face immediate and long-term difficulties when inflationary pressure remains high, interest rates tend to increase, credit growth has not met requirements, demand for loans increases at the end of the year, demand for foreign currency increases, risks from geopolitical tensions in the world, etc.

Along with that, the amount of money that people deposit in banks is currently over 15 million billion VND, the Prime Minister requested that there should be solutions so that this capital source can effectively serve production and business.

The Prime Minister requested to continue to consistently implement the Central Committee's Conclusion 64 on socio-economic development in 2023-2024; proactively, flexibly, promptly and effectively manage; and coordinate synchronously, harmoniously and closely with other policies.

Specifically, credit growth is controlled at around 15%, focusing on traditional and new growth drivers. Exchange rate is flexibly controlled using various tools.

Continue to direct and mobilize banks to reduce costs, apply information technology, and digital transformation to reduce lending interest rates for growth drivers and infrastructure projects; in which, state-owned commercial banks take the lead in implementing "harmonized benefits and shared risks".

At the same time, operate open market operations in accordance with market developments. Operate flexibly, harmoniously, reasonably, and balance interest rates and exchange rates. Operate credit in accordance with macroeconomic developments and inflation, meeting capital needs for the economy; withdraw unused credit growth quotas from credit institutions and supplement them for credit institutions with growth potential.

Continue to monitor and urge credit institutions to resolutely implement incentive programs. Promote digital banking transformation, reduce costs, fight negativity, and benefit the people.

At the same time, strengthen the management and control of the gold and foreign currency markets in a fundamental and methodical manner. Promote the handling of bad debts, drastically implement the Project "Restructuring the system of credit institutions associated with handling bad debts in the period 2021-2025"; focus on effectively implementing the plan to handle weak credit institutions; restructure commercial banks under special control according to the direction of competent authorities.

Improve information and communication work, focusing on clear and transparent communication about credit institutions' products, raising people's awareness. Strengthen supervision and inspection, enhance publicity and transparency.

The Prime Minister welcomed the State Bank's proposal to increase the credit package of 120 trillion VND for preferential loans for the development of social housing and workers' housing to 140 trillion VND with an increased loan term and reduced interest rates; requested to study appropriate access conditions and find ways to make this credit package work because this is a humane policy, helping people in difficulty have a place to live.