Governor of the State Bank of Vietnam Le Minh Hung speaks at the conference. (Photo: baochinhphu.vn)

The rise was higher than that of the same period last year, when thecredit rose by 6.14 percent.

At a Government teleconference with leaders of all 63 cities andprovinces nationwide on July 4, the SBV Governor attributed the rise tothe contribution from the processing and manufacturing sector as well asexports.

“We see loans in these areas have increased quite well,” Hung said,adding that the lending continually focused on production and business, and theGovernment’s prioritised sectors including agriculture and rural development,exports, parts-supply industry, small- and medium-sized enterprises (SMEs) andhigh-tech firms, while the capital to risky sectors, such as real estate andsecurities, was further controlled.

He also reported that the SBV managed interest rates in line withmacroeconomic developments and the monetary markets, with credit institutionsapplying reasonable lending rates on the basis of deposit rates and the risksof loans.

The central bank had all necessary tools to effectively control therate, the Governor said, adding since the beginning of the year, the fourState-owned commercial banks – Vietcombank, Vietinbank, BIDV, and Agribank –had thoroughly followed the Government and SBV’s direction in reducing interestrates for prioritised sectors. The work helped businesses lower costs and thebanking system keep a stable interest rate.

According to Hung, bank loans met the capital demand for production,investment and business, with deposit and lending interest rates stable.Currently, short-term lending rates are at 6-9 percent per year and 9-11 percentfor medium and long term. For customers with a healthy financial situation andhigh creditworthiness, lending rates for short-term loans are lower at some 4-5percent per year.

As for the foreign exchange market, the Governor said the SBV bought alarge amount of foreign currencies in the first half of 2019, pushing foreignexchange reserves recorded in the period to the highest level to date.

He said fluctuations in the global market in the first six months wereunpredictable but proactive and flexible measures had been taken to keep thedomestic foreign exchange market stable.

During the period, the central bank’s reference exchange rate for the USdollar against the Vietnamese dong was adjusted up by 1 percent, while therate listed at commercial banks and inter-bank rate were up by 0.3-0.4 percent.

The SBV would continue to follow a pro-active, flexible and cautiousmonetary policy as well as working in close conjunction with fiscal and otherpolicies to control inflation, sustain the macro-economy and support economicgrowth in the remaining months of this year, Hung said.-VNA