The State Bank of Vietnam (SBV) will continue conducting interest rate management in line with macroeconomic balance, inflation, and monetary policy objectives, and  guiding credit institutions to take measures to reduce loan interest rate as part of key tasks for the remaining months of the year in face of increasing bad debts, according to SBV Deputy Governor Dao Minh Tu at a press briefing held on July 23.

The central bank will manage the exchange rates in a flexible manner to stabilize the forex market, contributing to stabilizing the macro economy and curbing inflation, he said.

The SBV will manage credit growth and structure reasonably to meet the credit demand of the economy, contributing to curbing inflation and supporting economic growth. It will continue reviewing and perfecting legal framework to enhance credit supply and access while tightening management over lending for high-risk sectors.

The central bank will resolutely and effectively implement the plan on restructuring the credit institutions in connection with handling bad debts in 2021-2025 periods with the aim of developing credit institution system in a healthy, effective and transparent manner.

Measures will also be taken to handle bad debts and improve credit quality, according to Mr. Tu.

Non-performing loans in Vietnam’s banking system accounted for 6.9% of total lending by the end of June, 2024, he said.

The loans include on-balance-sheet debt, debt sold to the central bank-run Vietnam Asset Management Company, and rescheduled loans that are potentially convertible into bad debt.