Vietnam Business & Weather Briefing (Sep 8): SBV adjusts credit growth targets for banks

Business Briefing

Gold rate

SJC Hanoi: VND 66.15 million/tael (buying) – VND 66.97 million/tael (selling)

SJC HCMC: VND 66.15 million/tael (buying) – VND 66.95 million/tael (selling)

SJC Da Nang: VND 66.15 million/tael (buying) – VND 66.97 million/tael (selling)

Hanoi Doji: VND 66.10 million/tael (buying) – VND 66.90 million/tae (selling)

Doji Ho Chi Minh City: VND 66.10 million/tael (buying) – VND 66.80 million/ tael (selling)

Photo: Baotintuc

Reference exchange rate

The State Bank of Vietnam set the daily reference exchange rate for the US dollar at VND 23,281/USD on September 8, up VND 20 from the previous day. With the current trading band of +/-3 percent, the ceiling rate applied to commercial banks during the day is VND 23,979/USD, and the floor rate VND 22,582/USD.

The opening-hour rates at commercial banks increased. At 8:33 am, BIDV listed the buying rate at VND 23,460/USD and the selling rate at VND 23,740/USD, both up VND 20 from the end of transactions on September 7. Vietcombank listed the buying rate at VND 23,430/USD and the selling rate at VND 23,740/USD, the same as the closing rates on September 7.

Export news: Vietnam runs trade surplus of USD 3 billion with UAE

Two-way trade between Vietnam and the United Arab Emirates (UAE) was estimated at USD 3.3 billion in the first eight months of this year, with the Southeast Asian nation enjoying a trade surplus of some 3 billion USD. The Vietnamese Trade Office in the UAE suggested domestic firms set out suitable strategies for exports to the UAE which, it said, gathers many rivals due to its openness.

Notably, food and beverages exported to the UAE should meet Halal standards, the office said, asking Vietnamese enterprises to identify partners before cooperation and select safe payment methods to avoid any trade frauds. The UAE will serve as a gateway for Vietnamese businesses to step up exports to the Middle East and Africa, it suggested.

The office also proposed trade promotion agencies increase investment and trade forums with the participation of enterprises from both Vietnam and the UAE, as well as representatives from local management agencies while facilitating Vietnamese firms to participate in international exhibitions and fairs in Dubai. Launching or optimizing direct transport routes between the two sides will help cut transportation costs significantly, it said.

Photo: Nguoi Lao Dong

Finance news: SBV adjusts credit growth targets for banks

The State Bank of Vietnam (SBV) has announced adjustments to credit growth targets for banks in 2022. According to SBV, the adjustment of credit growth targets is made on the basis of the request of credit institutions to assess their operational requirements. The State Bank will continue to adjust credit growth in accordance with Directive No 01/CT-NHNN dated January 13, 2022, on organizing the implementation of key tasks in the banking sector. In 2022, the central bank has created favorable conditions for people and businesses to access credit, and support the country’s economic recovery.

Since the beginning of this year, global inflation has increased rapidly due to the escalation of prices of many goods and raw materials caused by the Russia-Ukraine conflict and the disruption of the global supply chains. High inflation pressure has affected daily life and macroeconomic stability in many countries. As a result, most central banks globally have taken strong measures to tighten monetary policy and raise interest rates to control inflation. Vietnam’s credit-to-GDP ratio – based on the new GDP calculation method – stands at 124%, as assessed by the World Bank (WB). This rate – based on the old way of calculating GDP – has surpassed 140%. These numbers are among the highest in the world and reach a warning level of high risk.

To obtain the country’s GDP growth target of between 6-6.5% and an average inflation rate of 4% set by the National Assembly and the Government, the SBV has continued to regulate monetary policies actively, flexibly, and strictly cooperate with fiscal policies and other macroeconomic policies to control average inflation at about 4% according to objectives in 2022, sustain macroeconomic development, assist economic development, promptly adapt to domestic and foreign market development. In 2022, credit increases by approximately 14%, with adjustments in accordance with practical situations.

In addition, the SBV has announced a credit growth target in 2022 based on the credit rating of each institution. The central bank has also worked with banks to handle poor credit institutions and reduce lending interest rates for businesses. As of August 26, credit growth rose by 9.91% against late last year. This is a high increase compared to the same period in recent years. Credit structures are mainly focused on the production and business sector while loans to potential risk sectors are strictly controlled by the State Bank.

Photo: Dan Tri

Weather Forecast

September 9: According to the National Center for Hydro-meteorological Forecasting, due to the influence of the tropical convergence, rain returns to the Northern Delta, Hoa Binh and Son La province with common rainfall of 30 – 60mm. The area from Thanh Hoa to Quang Binh will have heavy rain with a total rainfall of 40 – 80mm.