Tuesday, 11 Dec 2018
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ECONOMYBANKING & FINANCE

Vietnam credit growth outpaces money supply expansion

Updated at Friday, 21 Sep 2018, 06:51
The Hanoitimes - The difference between M2 growth and credit growth fell from VND238 trillion (US$10.24 billion) as at June 20, 2018 to only VND124 trillion (US$5.33 billion) August 22, 2018.
Credit growth in Vietnam has surpassed M2 money supply expansion since early July after the State Bank of Vietnam (SBV) withdrew cash from the banking system to reduce pressure on the exchange rate, according to the Bao Viet Securities Company (BVSC).
 
Illustrative photo.
Illustrative photo.
Accordingly, the difference between M2 growth and credit growth fell from VND238 trillion (US$10.24 billion) as at June 20, 2018 to only VND124 trillion (US$5.33 billion) August 22, 2018. 

Vietnam's credit growth hit 8.18 % in the first eight months of 2018, lower than a 10.8% expansion in the same period of 2017, 9.64% in January-August 2016, 10.21% in in January-August 2015 and the full-year target of 17%, informed the Ministry of Planning and Investment (MPI).

Meanwhile, according to the State Bank of Vietnam (SBV), as of August 22, 2018, M2 money supply growth was 8.3%, capital mobilization growth was 8.72%, and credit growth was 8.54% compared to the end of 2017. 

The consumer price index (CPI) rose by 0.45% in August compared to the previous month, while the average CPI in the January - August period increased by 3.52%, quite closed to the 4% target of the government. 

From BVSC's view, inflation risks in the four final months of 2018 are still unpredictable amid high domestic pork prices and global oil prices. Therefore, the SBV will continue to manage the monetary policies in a cautious but flexible manner, based on the actual inflation and capital demand of the economy.
Hai Yen
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