Official data showed that total lending in the banking system expanded 9.52% year to September 20, lower than an 11.02% expansion in the same period last year. The credit growth target has been set at 17% this year, meaning that credit can grow an additional 6-7% in the final three months.

Total outstanding loans in the banking system rose 7.86% in the first half this year, reaching VND6,827 trillion dong (US$291 billion), according to data of the State Bank of Vietnam (SBV), the country’s central bank.

Meanwhile, the total money supply increased 8.74% year to September 20, slower than a 9.59% expansion in the comparable period last year. Deposits at banks grew 9.15% in the nine-month period, also slowing down from a 10.08% increase a year earlier.

The SBV has stated it would stick to a policy to rein credit growth from now to the year-end, stressing that it would not loosen the credit growth quota for any commercial banks although many lenders have seen their lending room running up.

The Asian Development Bank said in an update last week that going forward, the SBV intends to pursue a more flexible exchange rate regime with the ultimate objective of gradually shifting its monetary policy framework from focusing on exchange rate stabilization and monetary-credit targeting to inflation targeting.

“Building on these recent measures and future policy intentions, there is merit in a tighter monetary policy in the near term to rein in inflation,” ADB noted.

Vietnam’s economic growth hit an eight-year high of 6.98% in the first three quarters this year, above the government’s target of 6.7% for the whole year.