The country's total means of payment next year will increase roughly by 16% to 18% against December, according to the State Bank of Vietnam (SBV).

News website Vneconomy.vn quoted SBV as saying that the credit growth will be between 12% and 14%.

The forecast was based on a government report on socio-economic development in 2015, which plans a GDP growth of 6 to 6.2% and inflation at 7%.

The central bank said that it will continuously apply flexible monetary and fiscal policies to meet the Government's targets of controlling inflation and stabilising the macro-economy.

The exchange rate will be also managed flexibly to boost economic growth, increase foreign reserves and ensure the value of the Vietnamese dong.

SBV will also implement credit policies to continuously remove difficulties for businesses to boost domestic production.

The central bank has so far applied monetary policies in accordance with the government's inflation control target.

According to SBV, the total means of payment by August 29 increased 9.09% against December last year, while capital mobilisation rose 8.52% and the credit growth was 6.21%.

SBV Governor Nguyen Van Binh attributed the low credit growth to weak capital absorption capacity of the economy, unsolved budget debts and the process of handling collaterals along with the loan underwriting mechanism for enterprises.

Binh anticipated that the credit will increase roughly 10% by the end of the year.

Cao Sy Kiem, chairman of the management board of DongA Bank, said that the capital demand may increase in the last few months of the year when businesses get busy, preparing for Tet festival. However, he added that the 10% target is achievable only if the government's programmes to bolster the total demand are laid out clearly with every single effective step and are taken seriously, while banks and enterprises are able to work co-operatively to pump and absorb capital.

Currently, credit institutions have adjusted the interest rate of old loans. As of August 14, the outstanding loans in dong with an interest rate of more than 15% accounted for 4.45% of the total number of loans, while the outstanding loans with an interest rate of more than 13%accounted for 12.45%.

VNS/VNN