Hanoi (VNS/VNA) 🦹— Lending interest rates in the remainingmonths of this year will stay relatively stable to help firms recoverproduction after the pandemic.

This is thanks to the 2-percent interest rate support package andbanks’ measures to cut input costs, according to Dr Hoang Van Cuong, vicepresident of the National Economics University. The Government in May this year issued a decree on interest ratesupport from the State budget for loans of enterprises. According to Cuong, though firms are looking forward to the 2-percentinterest rate support package to get cheap capital for their production andbusiness, in fact the number of firms that have been able to access the packageand newly disbursed loans under the package have so far been restricted. He attributed the restriction to the banks’ credit room. Mostbanks have so far used up all credit quota granted by the State Bank of Vietnamso that they cannot expand credit despite firms’ capital shortage. As Vietnam’s inflation in the first half of this year was wellcontrolled at 2.24% and the amount of money supplied to the economy over thepast years was not much, the official said it is necessary to expand the creditquota for banks so that they can boost lending and firms can access theinterest support package. The interest rate support package therefore can really aid firmsand have a positive impact on the economy, he said. According to Cuong, besides the package, banks have been alsoforced to take measures to save input costs and better manage loans to reducerisk provisions, so as to cut lending interest rates as directed by the SBV. Currently, some banks are also applying preferential interestrates of about 6.7-8.1% per year for 60-180 month business loans. Saigon Securities Incorporation (SSI) forecast the State Bank of Vietnamwill expand the credit quota for some banks in the third quarter of this yearand the move will cause the deposit interest rate to rise by 50-70 basispoints. As for the whole of 2022, the SSI expected the deposit interestrates to increase by 1-1.5 percentage points against 2021 while lendinginterest rates for new disbursements will be up 1-2%. For 2023, SSI forecast interest rates will be different in thefirst half and the second half of the year. Accordingly, the rates will remainunder upward pressure in the first half of 2023 as the consumer price index(CPI) is estimated at 5.2%. They then will likely cool down in the second halfof 2023 when inflationary pressures gradually ease with CPI estimated at 3.4%. For the whole of 2023, the rates are expected to increase by about70-80 basis points, reaching the rates before the pandemic./.