According to SBV, the adjustment of credit growth targets is made on the basis of the request of credit institutions assessing their operational requirements.

Customers at a National Citizen Bank office in Ha Noi. SBV has adjusted credit growth for commercial banks and restructured weak ones and reduced lending interest rates for businesses. - VNA/VNS Photo Tran Viet

The State Bank will continue to adjust credit growth in accordance with Directive No 01/CT-NHNN dated January 13, 2022 on organising the implementation of key tasks in the banking sector. In 2022, the central bank has created favourable 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 per cent, as assessed by the World Bank (WB). This rate – based on the old way of calculating GDP – has surpassed 140 per cent. These numbers are among the highest in the world and reach a warning level of high risk.

In order to obtain the country’s GDP growth target of between 6-6.5 per cent and an average inflation rate of 4 per cent 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 per cent 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 per cent, 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 per cent 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.