The foreign-currency credit growth in June was down to its lowest level since the beginning of this year, according to the latest estimates by the Ministry of Planning and Investment (MPI).

The MPI said that the credit growth had increased in the first months of 2010. By June 30, total outstanding loans were estimated to jump by 10.52 percent, in comparison with the end of 2009.

Thus, the credit growth target, expected to 25 percent, is still very challenging for commercial banks in the last 6 months of this year.

In the first half of this year, the foreign currency credit balance rose strongly. According to the MPI’s report, by end-June, the foreign currency credit growth was estimated to have risen to 27.5 percent compared to December, 2009.

However, the specific data of each month showed the growth of foreign currency credit has decreased respectively. Specifically, in January, the foreign currency credit growth was 2.11 percent; in February was 6.74 percent; in March was 5.95 percent; in April was 4.92 percent; in May was 3.73 percent and 1.45 percent in June.

Thus, the foreign currency credit growth has reduced slowly and the growth in June was slowest since early this year. This may be the initial successes of the cooperation between the Ministry of Industry and Trade and the State Bank of Vietnam to restrict foreign currency loans for imports of essential goods, which can be produced locally.

On the other hand, from mid-June, the central bank has been working out several measures to require credit institutions to strengthen foreign currency credit controls.

While the foreign currency credit growth increased sharply, the foreign currency deposits in the first six months of this year inched up only 3.09 percent compared to end-2009. If this gap is continuing to widen, this will negatively affect the stability and ability to balance the capital in the operations of commercial banks.

From mid-June, the market has also begun to embrace the new movement of deposit rates for US dollars as commercial banks raised dollar deposit rates strongly. Previously, the US dollar deposit rates were only around 4.5 percent per year, but commercial banks have now pushed the average rate up to over 5.25 percent – 5.5 percent per year.

TBKTVN