Comparing to the credit growth in 2016 and 2017 at 18.71% and 18.17%, respectively, the growth rate in 2018 should be much lower, while the structure of credit has now been shifted to manufacturing and processing, local media quoted Le Minh Hung, governor of the State Bank of Vietnam (SBV), as saying at a meeting on December 14. 

According to Hung, Vietnam’s inflation in the first 11 months averaged 3.59%, which is in line with the 4% target set by the government. 

Additionally, interest rates, exchange rate and the gold market have been stabilized and continue to support the business community, especially the private sector, Hung said. 

Hung also informed that the record high foreign exchange reserves in 2018 showed the market’s strong confidence in the government and SBV’s policies. This would be instrumental to support Vietnam’s macro policies in attracting foreign capital and bolster the economic resilience against external shocks, Hung added. 

Despite slower credit growth, Vietnam’s GDP expanded 6.98% in the first three quarters this year, the highest nine-month growth since 2011, according to official data.

The SBV is drafting new policies and legal framework to speed up the restructuring and tackling bad debts, which currently stands at 2.16%, with a view to complete the prime minister’s scheme on restructuring credit institutions in association with dealing with bad debts for the 2016 – 2020 period. 

This would include the target of “having 12 – 15 commercial banks meeting Basel II standards by 2020”. 

Basel II is a set of international banking regulations put forth by the Basel Committee on Bank Supervision, which leveled the international regulatory playing field with uniform rules and guidelines. 

Among the 10 commercial banks selected by the State Bank of Vietnam to pilot the application of Basel II standards, Orient Commercial Bank (OCB) and Tien Phong Bank (TP Bank) have met the target.