Banking & Finance

In Resolution No. 88/NQ-CP from the online government meeting with localities on the socio-economic situation in July and the first seven months of 2021, the government requested that banks pay attention to providing small loans to customers affected by the pandemic.

The price of construction materials has increased rapidly since the beginning of the year, affecting the profits of construction contractors as they grapple with Covid-19. Contractors have therefore proposed the government and State management agencies introduce tax exemptions and reductions, extensions to the time to repay bank loans, and exemptions and reductions on bank loan interest rates.

Vietnam’s stock market is similar in many ways to Taiwan (China)’s stock market in 1986, such as the percentage of individual investors participating and GDP per capita. VinaCapital has predicted that the development of the local stock market will continue for many decades. Vietnam aims to increase the proportion of individuals participating in the market from 3 per cent of the population to 5 per cent by 2025 and 10 per cent by 2030.

Experts believe that because the management level has not withdrawn money through the open market channel, both interest rates and exchange rates on the interbank market have fallen sharply. Prolonged social distancing in Hanoi, Ho Chi Minh City, and other localities has also affected production and business activities, and demand for output credit has also gradually fallen, creating capital congestion in the system.

The Ministry of Finance (MoF) aims to grow domestic revenue by 8-9 per cent a year over the next two or three years once the economy is free of Covid-19. It has also set a goal of recording average annual growth of 5-6 per cent in import and export revenue. State budget planning for 2022-2024 will have to assess and analyze the causes of increases and decreases in revenue in 2021.

Rong Viet Securities (VDSC) expects that credit growth will slow further due to Covid-19. If GDP growth is negative in the third quarter, the State Bank of Vietnam (SBV) may continue to cut the operating interest rate.