State Bank of Vietnam's Governor Nguyen Van Binh is planning a moreflexible monetary policy in the second half of this year to achievecredit growth of 12 to 14 percent by year-end.
At a conferenceheld by the central bank on July 9, Binh announced this year's firsthalf credit growth of 3.52 percent, which was largely due to a 12.03percent growth in foreign credit and 2.17 percent growth in dong credit.
Thelow credit growth, which has stirred concerns in recent weeks, wasblamed on weak capital absorption capacity of the economy, unsolvedbudget debts and the process of handling collaterals along with the loanunderwriting mechanism for enterprises.
In the second half of 2014, Hanoi will focus on managing bad debts, raising total demand and facilitating market recovery.
Policymakers said that credit demand in the second half was always twice thanthat of the first half. They expressed optimistic provisionary viewsover the entire year's target of 12 to 14 percent credit growth.
Earlier,a report by the Monetary Policy Department showed that roughly 87 to 90percent of capital sources in banks flew into Government bonds andState Treasury bills.
The central bank on July 9 said that thebond and bill purchases would help credit institutions raise liquidityprovision. However, they warned that the holding may probably cause somedifficulty if banks were not active in balancing tenures.
Interms of credit structures in the first half, credit increased 10percent for exports, 5.8 percent for auxiliary industries and 13 percentfor hi-tech applied production firms. Meanwhile, small and medium sizedenterprises showed a 2 percent increase in credit.
As of May, 2014, loans allocated for agriculture and rural areas were up 2.56 percent against the end of 2013.
Dongliquidity was secured. Loan-to-deposit ratio (LTD) in the dong camedown to 87.4 percent from 92.5 percent in December last. [The LTD ratioaccesses a bank's liquidity. If the ratio is too high, it means thatbanks might not have enough liquidity to cover any unforeseen fundrequirements and if the ratio is too low, banks may not be earning asmuch as they could be.]
By the end of June, the foreign exchangereserves were 35 billion USD. The central bank said the dollarisation inthe economy was dwindling.
The ratio of dollar deposit-to-total money supply was 11.4 percent, slightly down from 12.4 percent by the end of last year.-VNA
At a conferenceheld by the central bank on July 9, Binh announced this year's firsthalf credit growth of 3.52 percent, which was largely due to a 12.03percent growth in foreign credit and 2.17 percent growth in dong credit.
Thelow credit growth, which has stirred concerns in recent weeks, wasblamed on weak capital absorption capacity of the economy, unsolvedbudget debts and the process of handling collaterals along with the loanunderwriting mechanism for enterprises.
In the second half of 2014, Hanoi will focus on managing bad debts, raising total demand and facilitating market recovery.
Policymakers said that credit demand in the second half was always twice thanthat of the first half. They expressed optimistic provisionary viewsover the entire year's target of 12 to 14 percent credit growth.
Earlier,a report by the Monetary Policy Department showed that roughly 87 to 90percent of capital sources in banks flew into Government bonds andState Treasury bills.
The central bank on July 9 said that thebond and bill purchases would help credit institutions raise liquidityprovision. However, they warned that the holding may probably cause somedifficulty if banks were not active in balancing tenures.
Interms of credit structures in the first half, credit increased 10percent for exports, 5.8 percent for auxiliary industries and 13 percentfor hi-tech applied production firms. Meanwhile, small and medium sizedenterprises showed a 2 percent increase in credit.
As of May, 2014, loans allocated for agriculture and rural areas were up 2.56 percent against the end of 2013.
Dongliquidity was secured. Loan-to-deposit ratio (LTD) in the dong camedown to 87.4 percent from 92.5 percent in December last. [The LTD ratioaccesses a bank's liquidity. If the ratio is too high, it means thatbanks might not have enough liquidity to cover any unforeseen fundrequirements and if the ratio is too low, banks may not be earning asmuch as they could be.]
By the end of June, the foreign exchangereserves were 35 billion USD. The central bank said the dollarisation inthe economy was dwindling.
The ratio of dollar deposit-to-total money supply was 11.4 percent, slightly down from 12.4 percent by the end of last year.-VNA
