Governor of the State Bank of Vietnam Nguyen Thi Hong answers National Assembly deputies' questions. Photo: quochoi.vn

Governor Nguyen Thi Hong told the National Assembly during its Q and A session on Wednesday that given significant outside pressure on interest rate since early this year, the State Bank’s year on year interest rate increased by just 0.09% while loan growth was 8% given production recovery, which is high compared to the whole year target of 14%.

“The monetary and foreign exchange market was stable in the first 5 months of this year. Interest rate rose by only 0.09% and the State Bank will prevent major interest rate fluctuation. The bank has closely watched the situation and cooperated with the Finance Ministry to ensure macro stability through fiscal policy. The S&P Global Ratings' recent upgrade on Vietnam’s sovereign credit ratings to ‘BB+’ with a stable outlook demonstrated substantial effort by the government in macro economic management,” Hong said.

The State Bank has reviewed its credit institution restructuring guidance as its network of micro-finance funds in 24 cities and provinces found it difficult to mobilize resources for lending. National Assembly Chairman Vuong Dinh Hue stressed the importance of micro finance development to improve the vulnerable group’s access to credit. Governor Hong added that the State Bank has prepared to develop legal framework on peer to peer lending on mobile apps or web portals. She emphasized on the compliance of prudent reserve ratio to prevent bad debts.

The State Bank governor will continue the Q and A session on Thursday.