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No fixed credit growth rate should be set: advisory council (18/08)
06/08/2010 - 7 Lượt xem
Credit growth rate target needs reconsideration
In addition, the members of the National Advisory Council for Monetary Policy said that the 25-27 percent credit growth rate was unfeasible, since outstanding loans had grown by 22.67 percent by the end of July already.
If looking at China, one would see that the consumer price index (CPI) and industrial production of the country in July 2009 decreased by 1.8 and 8.2 percent, respectively, from July last year. Analysts believe that a rumour about the Chinese Government’s tightening of credit made the important indexes decrease in July, and that this may hinder consumption and investment in the time to come, when China still expects high a GDP growth rate this year (Goldman Sachs predicted that the economic growth rate may reach 9.4 percent).
Therefore, Chinese senior financial officials have announced that the Government will not change macroeconomic policies and will keep striving to obtain a stable and high economic growth rate as the top priority.
Loosening consumer credit
The State Bank of Vietnam has another reason to ask commercial banks to keep strict control over consumer loaning: high risks are latent in this kind of loan.
However, analysts have stressed that it is precisely consumer loans which can help stimulate demand in society. Demand will increase if people have more money to spend.
The Government is trying to stimulate demand by encouraging the construction of houses for low-income earners. However, the houses will be unsalable if people cannot borrow money from banks to purchase them.
As a government management agency, if the State Bank of Vietnam uses technical tools to limit consumer credit growth, this means that the central bank is intervening too deeply in banks’ operations, according to the council.
Source: VietNamNet/LD
