The Government has requested the State Bank of Vietnam (SBV) to apply more flexible policies to facilitate enterprises’ access to bank loans by the end of the year.
Vu Duc Dam, Chairman of the Government Office speaking at the meeting
The information was released at the Government’s regular meeting on November 29, which was presided over by Prime Minister Nguyen Tan Dung.
As a result, the Government has put in place requirements that the SBV to consider the application of a cap on lending interest rates as well as lowering lending rates in December to provide some support businesses in need of credit.
However, the Government also emphasised that the policies should be designed in a way that will not increase inflation.
The SBV was also requested an increase of the foreign currency reserve, a speed up the restructuring of commercial banks, especially for those banks in trouble and to deal with the bad debt issue.
According to Chairman of the Government Office, Vu Duc Dam, the country’s inflation rate may be kept at 7.5% this year if the country successfully implemented proposed measures.
Dam cited data by the General Statistics Office (GSO), which indicated that inflation had climbed to 6.52% by the end of November from the end 2011. According to their estimates and predictions, inflation for December may be les than 1%.
If the country stays on the right track it could meet its target for reducing inflation this year, he said.
“When inflation falls it obviously leads to a decrease in interest rates,” he emphasised.
He shared that in other periods when interest rates were rather high and the Government demanded a cut in interest rates, there were voices raised that the Government should not interfere and let the economy develop according to market rules.
But he reiterated his opinion that Vietnam is still in a transitional period economically and the regulation of interest rates and several other macroeconomic issues are of great importance.
