Tuesday,  Sep 25, 2018,10:48 (GMT+7) 0 0
Foreign currency lending extended until next year
The Saigon Times Daily
Friday,  Dec 29, 2017,15:03 (GMT+7)

Foreign currency lending extended until next year

The Saigon Times Daily

HCMC – The State Bank of Vietnam (SBV) on Wednesday allowed local banks and foreign bank branches to continue making foreign currency loans until the end of next year, according to news website Vietnamplus.

According to SBV’s new circular, these loans are aimed at meeting short-term capital needs for production and export activities at a time when banks still can raise foreign currency, ensuring benefits for customers as the lending rate for forex funds is generally lower.

Borrowers have to have sufficient foreign currency revenues from their export operations to repay loans.
SBV has seen many difficulties faced by exporters who need more support in the coming time. Enterprises will make repayments in their own foreign exchange revenues, so foreign currency liquidity at banks will not be affected.

SBV earlier announced that enterprises would not be able to borrow foreign currency loans from the beginning of 2018.

According to the central bank, foreign currency loans in the year to end-November had surged 12%, six times higher than in the same period last year, prompting SBV to consider tightening controls on foreign currency lending.

However, the central bank eased its standing as interest rates for Vietnam dong loans are far higher than those for foreign currency loans. For example, the interest rates for three- to six-month dollar loans currently range from 3% to 3.5% per year, way below 6-7% for Vietnam dong loans with the same tenors.

Banks boost lending to enterprises

In related news on credit, many banks are rushing to offer preferential loan packages to meet the demand of customers, especially corporate ones, and to do so, banks are taking measures to mobilize capital to have more funds, news website VnEconomy reports.

Credit institutions tend to raise their deposit rates at the end of the year, leading to higher lending rates. Therefore, small and medium firms find it hard to seek capital from banks, said the owner of a food processing company.

According to the National Financial Supervisory Commission, banks have pushed their credit growth rates over the last few months. A report on the 2017 financial market released by the commission shows that loans have grown 18.7-19.3% and probably 18-19% this year, contributing greatly to economic development.
Experts and banks forecast the huge demand for money of enterprises months ago. According to a survey of SBV’s Monetary Statistics and Forecast Department, loans may increase 5.32% on average in the last quarter of this year, above 3.74% in the same period last year. The rate is expected to reach 16.3% in the entire year.

Le Dang Khoa, acting general director of Maritime Bank, said the bank is willing to offer preferential loans for customers in need, especially small and medium enterprises.

Particularly, companies which generate revenue of at least VND17 billion (US$0.75 million) and have operated for at least two years can ask for loans of up to VND4 billion without asset mortgages.

Banks have focused on technology investment, risk and finance management and service quality enhancement to ensure their sustainable development.

Maritime Bank offers unsecured loans with an annual interest rate of 14%, much lower than the market’s average. The bank will approve loans for eligible customers within three to five working days, he affirmed.

Share with your friends:         
 
Business
World
Sport
Travel
 
Publication Permit No. 321/GP-BTTT issued on October 26, 2007
Deputy Editor-in-Chief: Pham Huu Chuong
Managing Editor: Nguyen Van Thang.
Assistant Managing Editor: Pham Dinh Dung.
Head Office: 35 Nam Ky Khoi Nghia St., Dist.1, Ho Chi Minh City, Vietnam. Tel: (84.28) 3829 5936; Fax: (84.28) 3829 4294.
All rights reserved.