Bank credit rises 16.3 percent in first eight months

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Vietnam's bank lending rose 16.3 percent in the first eight months of 2010 from the end of last year, the central bank said in a statement on its website Wednesday.

The nation has pressed commercial banks to cut interest rates and boost lending in an attempt to meet its target for a 25 percent increase in credit and 6.5 percent growth in gross domestic product this year. Vietnam's economy may expand as much as 6.7 percent in 2010 due to a recovery in domestic output and global trade, the government said September 1.

"Although it was not so low, credit growth is still a bit far from the target of the government for the full year," said Le Ba Hoang Quang, Hanoi-based director at Sacombank Securities Joint-Stock Co.

Prime Minister Nguyen Tan Dung in May told the State Bank of Vietnam to order lenders to bring down borrowing costs to 12 percent and cut the deposit rate to 10 percent.

Total deposits at local lenders increased 17.8 percent in the January-to-August period while total liquidity in the banking system rose 16.3 percent from the end of 2009 to the end of August, the central bank said.

Dong deposit rates were between 10.6 percent and 11.2 percent, according to the statement. Short-term lending rates in dong ranged from 12 percent to 15 percent. Loans for stock investment were charged a rate as high as 20 percent, the State Bank of Vietnam said.

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