Vietnam not seeking IMF loans: central bank

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The State Bank of Vietnam has said it has no intention to borrow from the International Monetary Fund to deal with the country's bad debt problem, rejecting recent reports suggesting otherwise.

The country's macroeconomic situation is stable and there is no reason for it to seek loans from the IMF, Deputy Governor Le Minh Hung said in an interview published on the government's website Friday. 

"Over the past years the Vietnamese government has maintained a strong and good relationship with the IMF via dialogues and policy consultancy and there has never been discussion concerning access to the fund's credit sources," he said, adding that the IMF only provides loans to countries that face temporary difficulties in balance of payments.

Hung said Vietnam's economy has seen many improvements in its trade balance, current account balance and foreign exchange reserves. "The confidence of the market and the public has been strengthened," he added.

The comments came after Bloomberg News published a report titled "Vietnam Risks Biggest East Asia IMF Rescue Since 1990s". It cited a report by the National Assembly's Economic Committee as suggesting that Vietnam should consider seeking IMF aid to restructure its banks.

"This is just one of the recommendations to the government in case it's needed," Bloomberg later quoted Nguyen Duc Kien, deputy head of the committee, as saying.

Vietnam's bad debts had risen to 8.6 percent of total loans in the banking system by the end of March.

Sanjay Kalra, the IMF's resident representative in Vietnam, said earlier this month that Vietnam needs to be patient in coping with the bad debt problem.

"What is required in the current situation, first of all, we need to reform the banking sector, we need to decide what is to be done and to handle the problem of non-performing loans," Kalra said in an interview published on the Vietnamese central bank's website.

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