Bank loan interest rates down nearly 1 point this year

Loans outstanding increased by 6%, central bank officials said at a meeting with Prime Minister Pham Minh Chinh Monday afternoon.

But growth slowed last month, falling to 5.66% for the year, with loans outstanding reaching VND14.33 quadrillion (US$570.3 billion) as of the end of July, they said.

The bank has been taking measures to make credit more accessible to businesses and individuals while also keeping inflation in check, help boost production and business activities and maintain the stability of the credit system.

It sought to extend the tenures and lower the interest rates for loans given from the VND120 trillion social housing credit package the government launched early last year to boost supply of affordable housing. It also sought to increase the package’s value to VND140 trillion.

Chinh acknowledged that the central bank’s monetary policy has contributed to achieving economic growth and the country’s social development goals this year.

But he noted that deposit interest rates are on the rise and reminded the bank of the 15% credit growth goal for the year.

He instructed the banking sector to find ways to utilize deposits, which currently total over VND15 quadrillion, to boost economic activity, keep lending interest rates low, especially towards the end of the year when demand for credit usually surges, and focus on lending to sectors that drive economic growth.

He also called for regulating the gold and foreign currency markets well and addressing issues related to bad debts.

Referring to the social housing credit package, he instructed the central bank to ensure people have more access to it.