Vietnam bank loans rise as lower rates lure consumers

TN News

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Vietnamese banks boosted credit 5.5 percent in the first four months of the year, helped by lower loan rates, central bank Deputy Governor Nguyen Dong Tien said.

Small businesses and consumers are taking out more loans at about 13 percent to 14 percent rate, the deputy governor said in Hanoi Wednesday. The Southeast Asian nation has been trying to bring down borrowing costs that climbed as high as 20 percent earlier this year after a link was severed between the central bank's benchmark and commercial banks' rates.

"The interest-rate level now is suitable to boost lending," Tien said.

The State Bank of Vietnam on April 14 issued guidelines for lenders to set their own rates for lending at "reasonable levels," and make it easier for companies to access funds.

The liquidity in the banking system rose 5.8 percent in the first four months of the year, Tien said without elaborating. The State Bank of Vietnam's target liquidity in the banking system is 20 percent, Tien said.

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