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| A customer conducts transaction at an Agribank office in Hanoi__Photo: VNA |
The State Bank of Vietnam (SBV) has raised the 2025 credit growth target for credit institutions and pressed ahead with lending rate cuts, in a move aimed at boosting capital flows into the economy and meeting the Government’s ambitious GDP growth goal of 8.3-8.5 percent this year.
The decision comes as system-wide credit expanded by about 10 percent in January-July, signaling stronger capital absorption and a clearer economic rebound compared to last year.
Compared with 2024, when credit growth at this point was only 6 percent, this year’s result reflects a clear recovery, driven by decisive policy changes that have boosted investor confidence and capital demand, said Assoc. Prof. Dr. Pham Thi Hoang Anh, Vice President of the Banking Academy.
However, she stressed that credit expansion must be paired with quality control, directing loans to production, priority sectors, and new growth drivers.
Assoc. Prof. Dr. Nguyen Thuong Lang, senior lecturer at the National Economics University, said achieving GDP growth of 8.3-8.5 percent this year would require credit growth in the remaining months to be 1.8-2.3 times higher than in the first seven months. He emphasized improving credit quality, especially in green, high-tech, and innovation projects, along with lowering lending rates to stimulate demand and boost economic activity.
Many commercial banks have lowered lending rates, a key driver for credit expansion.
Nguyen Viet Anh, Deputy CEO of the Tien Phong Commercial Joint Stock Bank (TPBank), said the bank has restructured operations and applied technology, particularly in credit appraisal, to cut costs. It has also boosted current account savings account (CASA) mobilization and tapped foreign funds, enabling lending rates to fall by over 0.85 percent in the first half of 2025.
At the Bank for Investment and Development of Vietnam (BIDV), CEO Le Ngoc Lam said the bank has reduced income by about VND 3 trillion (USD 114.4 million) to lower lending rates, which are now down 0.4 percent from the start of the year.
Flexible policy to prioritize growth
On August 5, the Government issued Resolution 226/NQ-CP, directing the SBV to adjust the credit growth target transparently and in line with inflation control goals, to help meet the GDP growth target of 8.3-8.5 percent.
The SBV was tasked with closely monitoring developments, managing monetary policy tools proactively and flexibly, and coordinating with fiscal and other macroeconomic policies. Credit institutions were instructed to reduce costs, lower lending rates, enhance credit quality, and limit bad debts, while focusing loans on production, priority sectors, traditional growth drivers (investment, exports, consumption) and emerging ones (science and technology, innovation, digital and green economy, circular economy, social housing).
Experts agreed that balancing credit growth with quality will be crucial in the rest of 2025. Hoang Anh noted banks should focus on short-term capital, while medium- and long-term needs should be met through securities and bond markets. She also called for deposit rate adjustments alongside lending rate cuts to maintain inflation control and exchange rate stability.
Lam suggested the SBV continue supporting market liquidity, consider raising online lending limits, and maintain policy flexibility to create favorable conditions for credit growth.- (VNA/VLLF)
