Vietnam banks allowed to resume dollar loans to exporters
Vietnam’s central bank has permitted commercial lenders to resume dollar loans to export businesses starting June 1, two months after it banned that activity, amid economic difficulties.
In a circular released on May 27, the State Bank of Vietnam said that local banks and subsidiaries of foreign banks are allowed to offer short-term dollar loans to export companies until the end of this year as long as these companies will be able to pay off their debts from their export revenues.
On March 31, the central bank tightened dollar lending in an attempt to prevent dollarization, stipulating that local banks and subsidiaries of foreign banks can only provide foreign-currency loans to importers and businesses with overseas investment.
Vietnam’s economic growth slowed in the first quarter as the country’s income from crude and agriculture production dropped.
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Gross domestic product (GDP) rose 5.46% in the first three months from a year earlier, according to the General Statistics Office. That compares with the 7.01% pace in the last quarter of 2015.
Official figures show that more than 28,500 businesses across the country ceased operations in the first five months of this year, a 26% year-on-year increase.
Meanwhile, more than 4,600 businesses completed dissolution procedures in Jan-May, up 20% from the same period last year.
The country has also seen the establishment of more than 44,700 new businesses in the first five months, up 24%.
