Prime Minister of Vietnam directs further strengthening measures for interest rate and credit management in Vietnam

On December 16, 2024, the Prime Minister of Vietnam issued Official Telegram 135/CD-TTg regarding further strengthening measures for interest rate and credit management in Vietnam.

Prime Minister of Vietnam directs further strengthening measures for interest rate and credit management in Vietnam

To continue further improving the effectiveness of monetary policy, interest rate, and credit management, and to enhance state management in the monetary and banking sector to strongly boost economic growth, accelerate, and make breakthroughs to achieve and surpass all major targets of the socio-economic development plan for 2024, and at the same time, strive to achieve the highest results of the goals, targets, and tasks of the socio-economic development plan for 2025 and the five-year plan 2021 – 2025 according to the guidelines, Resolutions, Conclusions of the Communist Party, National Assembly, and the Government of Vietnam in the spirit of "The Communist Party has directed, the Government of Vietnam has agreed, the National Assembly concurs, the People support, and the Fatherland expects, only proceed forward, not backward", the Prime Minister of Vietnam requires the State Bank of Vietnam to lead, cooperate with related agencies:

- Continue to closely monitor international and regional developments, the changes and adjustments in the financial and monetary policies of major economies to evaluate, analyze, and have policy responses promptly and effectively; manage monetary policy actively, flexibly, promptly, and effectively, coordinate closely and harmoniously with fiscal policies reasonably expanded, focused, and other macro policies in accordance with the guidelines, Resolutions, Conclusions of the Communist Party, National Assembly, Government of Vietnam, the direction of the Prime Minister of the Government of Vietnam in Official Telegram 122/CD-TTg of 2024 and the directives of the leadership of the Government of Vietnam, ensuring to strongly promote growth associated with macroeconomic stability, control inflation, ensure major balances, accelerate and make breakthroughs achieving an economic growth rate in 2025 of 8% or more, and set the stage towards double-digit growth for the period 2026 – 2030.

- Focus intensely on implementing more decisively and effectively the tasks and solutions on managing interest rates, exchange rates, credit growth, reducing lending interest rates, especially closely controlling the deposit rates of commercial banks... to meet capital needs for the economy during the year-end 2024, the Lunar New Year of the Snake and early months of 2025, ease difficulties for people and businesses, support production and business development, create jobs, livelihoods for people in the spirit of harmonious benefits, shared risks, mutual support, ensuring the flow of credit into the real economy most substantively and effectively, absolutely avoiding bottlenecks, delays, incorrect timing, incorrect addressees, creating mechanisms of asking and giving, negativity in credit granting of the credit institution system.

- Continue to more effectively and vigorously implement solutions within authority to reduce the lending interest rate level of the credit institution system, support the people and businesses to have conditions for production and business development, generating revenue, profits and repay loans to banks. Firmly handle according to authority and legal regulations those credit institutions that engage in unfair, unconformable interest rate competition (including both deposit and lending interest rates).

- Direct credit institutions to concentrate credit into production and business fields, priority sectors, and traditional economic growth drivers such as investment, consumption, export, and new growth drivers such as digital transformation, green transition, climate change response, circular economy, sharing economy, science, technology, and innovation...; strictly control credit for risky fields, ensure safe and effective credit activities; reduce costs, strengthen information technology application, digital transformation... to have room to reduce lending interest rate levels.

- Further strengthen inspection, examination, control, and close supervision of the activities of credit institutions, especially the announcement of deposit and lending interest rates, credit granting activities of credit institutions; promptly resolve violations in accordance with the law.

- Focus on suitable, effectively resolving solutions for bad debts of the credit institution system, prevent new bad debts, and ensure the safety of the credit institution system's operations.

More details can be found in Official Telegram 135/CD-TTg issued on December 16, 2024.

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