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HANOI, Dec 27 (Reuters) – Vietnam’s central financial institution stated on Tuesday it was making efforts to shore up international alternate reserves by shopping for up extra U.S. {dollars}, after it was pressured to promote a considerable amount of buck earlier within the 12 months to assist its dong forex.
The State Financial institution of Vietnam (SBV) additionally stated it can handle financial coverage in a versatile technique to maintain inflation at 4.5% subsequent 12 months, aiming to “stabilise the financial and international alternate markets to make sure the security of the banking system”.
Lending by Vietnamese banks rose 12.87% as of Dec. 21 from the top of final 12 months, the SBV stated in a press release.
At a information convention on Tuesday, Dao Minh Tu, a deputy SBV governor, stated the inflation price must be beneath 4% in 2022, and that non-performing loans within the banking system have been below management.
Tu stated the SBV was shopping for {dollars} to spice up its international alternate reserves, however offered no particulars.
The central financial institution earlier this 12 months was pressured to promote a considerable amount of U.S. {dollars} to the market to assist the dong, which has fallen to report lows in current months as a consequence of capital outflows because the U.S. Federal Reserve repeatedly raises rates of interest to tame inflation.
Market analysts stated the SBV had bought about $20 billion value.
Vietnam doesn’t present common disclosure on the dimensions of its international alternate reserves. Late in 2021, the SBV put the determine at $100 billion.
The central financial institution early this month raised its 14% cap on credit score progress for the banking system this 12 months by 1.5 to 2.0 share factors, following a credit score crunch within the property sector and its monetary markets.
Vietnam has one of many fastest-growing economies in Asia, backed by sturdy manufacturing and strong exports, with gross home product progress of 8% forecast this 12 months. Its financial enlargement additionally depends closely on sturdy credit score progress.
Reporting by Khanh Vu; Enhancing by Martin Petty and Christopher Cushing
Our Requirements: The Thomson Reuters Belief Rules.
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