Vietnam's economic hub prioritizes credit for
business to boost economic recovery

Vietnam's southern Ho Chi Minh city will continue to prioritize credit for production and business to boost economic recovery amid high-interest rates, local media reported on Thursday.

The credit flow would be directed to priority fields including agriculture, rural areas, exports, small and medium-sized enterprises, supporting industries, high-tech enterprises, the local newspaper Vietnam News reported, citing Nguyen Duc Lenh, deputy director of the State Bank of Vietnam's Ho Chi Minh city branch.

Credit institutions must ensure stable liquidity, safe banking operations, and strictly control credit from potentially risky areas, according to Lenh.

Credit growth for production and business in Ho Chi Minh city, Vietnam's economic hub, accounts for 60-70 percent of the total outstanding loans, said Lenh.

Meanwhile, interest rates are still too high, despite the central bank calling on banks to cut lending rates to support enterprises, according to local economist Le Xuan Nghia.

Interest rates at banks have surged to as much as 12 percent per year, pushing lending interest rates up to 15-16 percent a year, he said.

Experts have predicted the deposit interest rate will remain high at least until June, and the deposit rate would peak in the first half of 2023 with an increase of 1-1.5 percentage points, the newspaper reported.