'Expanding credit limits' by an additional 1.5-2% for the system of credit institutions.

According to the State Bank of Vietnam (SBV), the principle for adjusting credit targets for credit institutions is that those with better liquidity and lower interest rates will be allowed higher credit growth.

The Governor of the State Bank of Vietnam requested credit institutions to balance capital appropriately to provide credit, focusing capital on production and business sectors, especially priority sectors such as agriculture, rural areas, exports, small and medium-sized enterprises, supporting industries, etc., and growth drivers in accordance with the policies of the Government and the Prime Minister.

Headquarters of the State Bank of Vietnam.

The State Bank of Vietnam affirms that expanding credit must go hand in hand with controlling maturity risks to ensure liquidity, operational safety, and the ability of businesses and individuals to make payments, especially during the Lunar New Year holiday.

The Governor also requested the State Bank of Vietnam to closely monitor the situation and provide timely liquidity support through various channels, and if necessary, provide support with longer maturities, including extending the term beyond the Lunar New Year holiday, so that credit institutions can feel more secure when granting credit.

These are flexible solutions in the current situation. Furthermore, in the coming period, the State Bank of Vietnam will closely monitor forecasts and developments, especially inflation trends, to formulate guiding targets and monetary and credit management solutions for 2023.

Earlier, speaking at a meeting with key leaders of Bac Lieu province on the afternoon of December 4th, Prime Minister Pham Minh Chinh directed the State Bank of Vietnam to review and classify businesses and credit institutions that operate efficiently, soundly, safely, and sustainably; to immediately research and implement appropriate and effective credit limit increases to control inflation, promote growth, create jobs, and focus on three growth drivers: consumption, investment, and exports, while supporting businesses during difficult times.

According to the macroeconomic outlook and investment strategy report of VNDirect Securities Joint Stock Company, banking system credit increased by 16.5% year-on-year and 11.5% year-on-year as of the end of October 2022, higher than the growth rate in the same period last year (8.8% year-on-year). However, credit only increased by about 2% from the end of June to the end of October (9.44% year-on-year increase in the first six months of 2022), indicating a significant slowdown in credit growth as controlling inflation and stabilizing the macroeconomy remains the top priority of the Government for the remainder of 2022.