Central bank asks for foreign exchange reports

Photo: Tuoi Tre

The State Bank of Vietnam has asked credit institutions to provide reports concerning outstanding loans and investments that involve US dollars.

The State Bank is requesting the information so that the institution can begin drafting a monetary policy for the latter months of the year.

Lenders were also told to draw up plans concerning how they will use their foreign currency reserves to pay debt during this year's final quarter and next year's first quarter.

The report must be completed and delivered to the State Bank this Friday.

By the end of September, total outstanding loans in foreign currencies at banks in Ho Chi Minh City were VND186.1 trillion (US$9.5 billion), up 36 per cent against the same period last year.

The US dollar credit growth during September increased by 6.1 percent against August, while the month-on-month dollar credit growth in August was up just 1 percent against July.

In an unusual move, loans in foreign currencies exceeded mobilized capital. Financial experts explained that banks had a surplus of US dollars that they received from mother companies or foreign credit institutions.

This is the second time the central bank has asked for such reports.

In May, commercial banks and financial companies were ordered to provide a detailed report about their foreign exchange operations to help reduce the country's trade deficit and improve Vietnam's payment balance.

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August dollar mobilization falls in city

HCMC – Mobilization of foreign currency, mostly the U.S. dollar, dropped by 4% month-on-month to VND167.1 trillion at credit institutions in the HCMC last month, leading dollar mobilization by late August to grow only 5.3% from late last year.

Meanwhile, outstanding loans in the dollar by late August are estimated at VND175.4 trillion, up 1% month-on-month, according to estimates by the HCMC branch of the State Bank of Vietnam.

Dollar credit growth from January till August was a staggering 28.5%, much higher than the rise in mobilization. So, outstanding loans in dollar at HCMC banks exceed the amount of dollars raised.

According to the central bank’s city branch, outstanding dollar loans made by foreign banks are 48.6% higher than the mobilized amount. The lenders have been able to manage this lending and borrowing imbalance as they have got funds from their mother banks or other foreign credit institutions.

Of note is that the non-performing loan ratio at foreign banks is lowest, at 0.62%.

While dollar credit growth in January-August was high, Vietnam dong credit grew only 5.8% from late last year and mobilization growth by late August was 16.3%.

The first eight months of the year saw outstanding loans at credit institutions in HCMC rising 11.3% from late last year, lower than the mobilization growth rate of 13.3%.

By late July, outstanding real estate loans in HCMC had amounted to VND92.86 trillion, 15% of the total while consumer loans had reached VND32 trillion, 5.19% of the total. The remaining outstanding loans, at nearly 80%, were for manufacturing and trading and came with an interest rate of 12.5% to 14%, the central bank’s city branch said.

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