Central bank urged to ease business difficulties

Trong made the request during a working session with the State Bank of Vietnam in Hanoi on December 22, citing the difficulties many businesses face getting the loans they need to maintain production and worker salaries due to their bad debts and high interest rates.

Although rates have been lowered several times this year, only a small number of businesses have taken out loans. Businesses cannot undertake new loans until they pay old debts saddled with high interest rates.

Party leader Trong says the banking system plays an important role in maintaining the macroeconomic stabilisation and reining in inflation

The economic slowdown is taking a heavy toll on domestic production, causing many businesses to go bankrupt or halt operations.

While the restructuring process continues, the banking system also needs to manage its interest rates flexibly to improve liquidity and ensure businesses can access loans, said Party leader Trong.

He praised the central bank for its efforts to stabilise the macroeconomy, contain inflation and ensure social security, all closely linked to reinvigorating the growth model.

It was reported that over the past two years the central bank has introduced measures to stabilise the value of the domestic currency (VND), prevent the dolarisation of the economy, increase foreign currency reserves, and improve the liquidity of credit organisations.

It has formulated a 2011-2015 restructuring plan to improve the banking system’s efficiency. It has also finalised plans for settling credit organisations’ bad debts and establishing a State asset management company. These plans will be submitted to the Party’s Political Bureau and the Ministry of Finance for consideration later this month.