Credit in 2018 is seen expanding less than 16%, the lowest in four years, VnEconomy news site reported, citing State Bank of Vietnam Governor Le Minh Hung.

A bank teller counts Vietnamese banknotes

Speaking at a meeting with international organizations, embassies, bilateral and multilateral partners and credit institutions on December 14, the governor said that the central bank had adopted a prudent yet flexible monetary policy based on the fiscal and macroeconomic policies this year.

Average inflation was recorded at 3.59% in January-November, showing success in curbing inflation under 4%. In addition, interest rates were maintained at a low level and gold prices and the market remained stable.

Hung also said that foreign reserves had stayed high this year, indicating rising confidence in the Government’s policies and the State Bank of Vietnam. These positive signs support other macroeconomic policies in attracting foreign investment and boosting competitiveness.

As such, this year will mark lower credit growth than the last three years, at 18.7% in 2016 and 18.1% in 2017.

In addition, the governor praised the strong performance in restructuring the banking system and handling bad debts.

The central bank has adopted policies and mechanisms to speed up the restructuring of bad debts to fulfill the 2016-2020 plan.

Accordingly, a series of bank documents and regulations have been issued in line with international standards to enhance governance and risk management.

As bad debts sharply dropped and were brought under control at a rate of 2.16% and regulations and rules on banking systems were imposed, depositors’ confidence rose, Hung said.

SGT