Oct 17 2024: Vietnam remains on track to achieve its economic growth target for the year, despite the significant damage caused by Typhoon Yagi, according to Deputy Governor Dao Minh Tu of the State Bank of Vietnam (SBV). During a media briefing on Thursday, Tu emphasized that business and manufacturing activities are rebounding from the typhoon’s impact.
“The central bank will continue to implement supportive monetary policies throughout the remainder of the year,” Tu said. “We will keep policy rates at their current levels and are open to the possibility of further rate cuts.”
As of September 30, bank lending in Vietnam had increased by 9% since the end of 2023. With economic growth heavily reliant on lending, the central bank is targeting a 15% credit growth rate for the year.
Vietnam’s gross domestic product (GDP) grew by 7.4% in the third quarter, the fastest rate in two years, driven by strong exports, industrial production, and foreign investment. This growth helped offset the damage caused by typhoon-related flooding in September. Meanwhile, consumer prices for the first nine months rose by 3.88% year-on-year, staying below the government’s inflation cap of 4.5%.
In addition to monetary policy, the SBV announced significant banking sector reforms. Vietcombank, the country’s largest bank, will acquire the smaller Construction Bank, while Military Commercial Joint Stock Bank (MBBank) will take over Oceanbank. These moves are part of a broader restructuring program aimed at stabilizing the financial sector and addressing non-performing loans.
Nguyen Duc Long, deputy head of the SBV’s inspection department, stressed the importance of these takeovers, saying, “The goal is for the banks to return to normal operations, manage their accumulated losses, and safeguard depositors’ rights.”
Plans for restructuring two other underperforming banks, DongA Bank and Global Petro Bank, are still under review.
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