The move, in the eyes of analysts, continues to tighten lending in the last months of the year.

Monetary policy won’t affect GDP

The GDP grew by 6.98 percent in the first nine months of the year, the highest growth rate since 2011. 

To obtain the 6.7 percent growth rate for the whole year of 2018, Vietnam needs to have 6.1 percent growth rate in Q4, which is within reach if noting that the Q4 average growth rate in the last five years was 6.87 percent.

If the growth rate in Q4 this year is between 6.1 and 6.8 percent, the GDP growth rate in 2018 would be 6.7-6.9 percent, or reach 7-7.1 percent.

The HCM City Securities Company (HSC) commented that Vietnam’s GDP did not grow well in Q3 though SBV was cautious with credit growth. 

While the official credit growth rate limit was set at 17 percent, the real limit granted to banks was 14 percent only.

In previous years, SBV granted more ‘credit growth quotas’ to certain banks in the final months, after considering their asset quality. 

However, it hasn’t taken similar moves this year. It has reminded commercial banks not to increase lending to risky business fields, including real estate.

Some analysts and associations have expressed concern that the monetary policy tightening will affect the GDP growth rate in Q3. 

The HCMC Real Estate Association asked SBV to delay the implementation of a new regulation on lowering the proportion of short-term capital that banks can use for long-term loans.

HSC believes that the results of the tightened monetary policy will only be reflected in GDP growth rate after several quarters.

HSC commented that the central bank is very likely to continue to curb credit growth in upcoming months because it wants to keep inflation below 4 percent and the dong/dollar exchange rate stable.

Bank profits to go down?

HSC still predicts that pre-tax profits of listed banks will rise by 45.2 percent in 2018. The credit growth slowdown would only have mild impact on banks’ operations, because the NIM and non-interest income are on the rise. 

The General Statistics Office (GSO) announced a CPI increase of 0.59 percent in September compared with the month before.

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