Firstly, the commission said, the pressure from the exchange rate is not too large, as the US dollar has devalued by more than 7% since early this year, and the chance to raise interest rates this year from the US Federal Reserves is less than 50%.
Secondly, inflation is more likely to stay below the National Assembly’s target of 4%.
Thirdly, the country successfully issued 75% of the Government bonds planned for the entire 2017, and the G-bond yield decreased by 0.2 percentage points to 0.3 percentage points compared with the end of June, and 1 percentage points compared with the same period in 2016. Hence, it would facilitate the reduction of interest rates in the banking sector.
According to the commission, thanks to the positive movements in interest rates when the deposit interest rates are stable, lending has so far grown positively. Credit growth by the end of July 2017 was 9.3%, compared with the end of 2016.
The lending structure by currency also continued to remain stable with loans in the đồng accounting for 91.7% of the total outstanding loans.
Despite the rapid increase in lending, the liquidity of the banking system has been plentiful and inter-bank rates fell to the lowest level, since the beginning of the year.
As a result, the State Bank of Vietnam (SBV), in the first seven months of the year, withdrew VND48.6 trillion (US$2.13 billion) via the open market operations (OMO).
According to the commission, liquidity is plentiful because the SBV bought a significant amount of foreign currency to increase the foreign exchange reserves, thereby increasing the supply of đồng to the market.
According to the latest data released by SBV Governor Le Minh Hung, foreign exchange reserves are currently over US$42 billion.
However, the commission noted that the proportion of medium- and long-term loans decreased to 53.9% against 55.1% at the end of 2016, while short-term credit accounted for 46.1% against 44.9% at the end of 2016.