Flexible monetary policy will help banks, businesses: experts

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Vietnam needs to have a more flexible monetary policy to prevent negative impacts on banks and enterprises during the second half of the year, experts said.

According to the National Assembly Committee for Economic Affairs, credit growth should be maintained at a reasonable level through the year end. Across-the-board lending restrictions are not advisable, the committee said.

Ha Van Hien, chairman of the committee, said in at a meeting in Hanoi Thursday that many companies had faced more difficulties this year due to limited credit access and high borrowing costs. He said a number of companies even had to halt operations or shut down completely.

There was an estimate that around 30 percent of companies have gone bankrupt, Hien said, without saying where the statistics came from.

Other members of the committee suggested credit growth be at 23 percent, instead of the current target of 20 percent set by the government.

The Committee for Economic Affairs also expressed concerns over soaring inflation, which has far exceeded the original full-year target of 7 percent. It said high consumer prices are hurting many people, especially the three million poor households and 1.6 million others living on the verge of poverty.

Inflation almost hit 21 percent in June. Minister of Investment and Planning Vo Hong Phuc said Thursday that the government has raised the inflation target to 17 percent.

"Even this target requires efforts because it would be good enough to end the year with an inflation rate in the 17-18 range," he said.

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