They were made by business leaders at a conference held in Ho Chi Minh City on May 11 with officials from the central bank, the HCM City People's Committee and other localities in the region, to discuss monetary and credit solutions for their difficulties.

The country’s largest economic region accounts for 30.8% of its GDP, 40.4% of FDI and 45% of revenue collections, but its growth is slowing down.

Phan Van Mai, Chairman of the HCM City People's Committee, cited a report by the HCM City Union of Business Associations saying nearly 50% of businesses lack orders and only work enough to retain employees, and so are unlikely to need bank loans.

But the rest have a need for working capital, and many face difficulties in repaying loans, he said.

Forecasting that the economy would face challenges during the rest of the year due to the escalating global difficulties, he urged the SBV to reduce loan interest rates to 7-8% from the high 10% now.

Nguyen Thi Hoang, Vice Chairwoman of the People’s Committee of Dong Nai province, said the SBV should instruct banks to actively implement the 2% interest rate subsidy programme mandated by the Government’s Decree 31/2022/ND-CP, and the debt rescheduling required by its own Circular No 02/2023/TT-NHNN.

She said businesses complain that the procedures for both are complicated, and so the banking industry needs to review them.

Ly Kim Chi, Chairwoman of the HCM City Food and Foodstuff Association, urged the SBV to reduce the policy rate by another 0.5 percentage points this month to help banks reduce their loan rates to 7-8%.

The current rates of around 10% make it difficult for businesses to recover, she said.

SBV Governor Nguyen Thi Hong assured that the banking industry would continue to help businesses overcome their difficulties and restore their health.

The SBV seeks to keep exchange rates steady and reduce loan interest rates at an appropriate time, she said.

Localities and ministries need to closely co-ordinate with the banking industry and come up with comprehensive support measures in terms of credit, taxes and fees, trade promotion, and administrative procedures, she said.

She urged banks to work with local authorities, business associations and industrial parks and export processing zones to enable lending and cut costs to reduce interest rates.

“The State Bank of Vietnam wants to resolve difficulties faced by businesses while still ensuring monetary policy stability and macro-economic safety.”/. VNA