HCMC – Enterprises will find it more difficult to take out bank loans in the U.S. dollar from now to the end of the year given the banking system’s slower mobilization and the country’s trade deficit reduction effort.
Dinh The Hien, a member of the advisory board of Vietnam Export Import Commercial Bank (Eximbank), said that in the first half of this year when lending rates in dong were much higher than those for the dollar and the forex exchange rate was stable, enterprises benefited much from getting dollar loans.
However, from now to the year-end this advantage will disappear as banks will have to cut lending rates for Vietnam dong funds at the request of the Government, thus either reducing or abolishing the difference between dollar and dong interest rates, Hien added. Many banks are offering lending rates of 12% to 13.5% a year for enterprises at the moment.
Meanwhile, Tran Hoang Ngan, a member of the National Financial and Monetary Policies Advisory Council, said the State Bank of Vietnam had asked lender banks to limit dollar loans to help curb the trade deficit so it would be hard for enterprises to access dollar funds.
Sharing Ngan’s view, Pham Duy Hung, general director of Vietnam Asia Commercial Bank (VietA Bank), said his bank was giving priority to exporters who had dollar revenue.
Since last week, some major lenders such as Asia Commercial Bank (ACB) and Eximbank have raised their interest rates for U.S. dollar deposits to a maximum of 4.45% a year while some other joint-stock banks have increased their dollar deposit rates above 5%.
That shows dollar mobilization could not meet demand for dollar loans at banks. In fact, growth in U.S. dollar credit at banks in HCMC alone was 28.8% in the first seven months of the year while credit growth in Vietnam dong was only 5.1%, show figures of the central bank’s HCMC branch.
Meanwhile, according to figures of the National Financial Supervisory Committee, outstanding loans in the dollar in the banking system have exceeded dollar mobilization by VND40 trillion, equivalent to US$2.05 billion. Therefore, the possibility of banks increasing outstanding loans in the dollar in the rest of the year is small, experts said.
Ngan said export enterprises could borrow dollars as they had foreign currency income to pay debts and the forex rate risk would not be a problem for them. Meanwhile, other enterprises should receive loans in Vietnam dong as banks have reduced their lending rates for the local currency and put on many programs to boost their credit growth in Vietnam dong following their targets for the year.
For example, Asia Commercial Bank (ACB) has announced a VND3 trillion budget to give out loans for enterprises at preferential rates. An Binh Commercial has an unsecured loan program for small and medium enterprises, and Vietnam International Commercial Bank has a credit line of VND1.5 trillion for financing wood processing enterprises.
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