As of September 20, 2021, credit growth in Vietnam’s economy reached 7.17%, 1.4 times higher than the 4.99% growth recorded during the same period last year. The State Bank of Vietnam (SBV) affirmed that while the economy still faces headwinds, the steady credit expansion reflects positive momentum and serves as a basis for recovery expectations.
Credit and Interest Rate Developments
According to the General Statistics Office (GSO), credit growth reached 7.17%, highlighting improved capital flows in the banking system amid ongoing challenges caused by the COVID-19 pandemic.
To support businesses hit hard by the pandemic, commercial banks — following the Prime Minister’s direction — have lowered lending rates on existing loans from mid-July through the end of 2021.
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Short-term lending rates for priority sectors average 4.4% per year, slightly below the SBV’s regulatory ceiling of 4.5%.
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Deposit rates continued to decline as liquidity remained abundant and credit demand slowed. Deposit rates range from 0.1–0.2% for non-term deposits to 6.9% for long-term savings above 24 months.
Consequently, total capital mobilization in the banking system grew by 4.28% in the first nine months of 2021 — well below the 7.48% pace seen during the same period in 2020.
Foreign exchange markets remained stable, with smooth liquidity and effective settlement operations. The SBV continued promoting non-cash payments, helping maintain safe and efficient transaction flows while adapting to pandemic conditions.
Credit Recovery and Business Outlook
Experts noted that despite liquidity support, credit growth will depend on business capital absorption capacity. The VNDirect Research Center revised its 2021 industry-wide credit growth forecast down to 10–12% (from 13%) due to weak demand amid the fourth COVID wave.
In the baseline scenario, analysts expect infection rates to decline and mobility restrictions to ease by late September, leading to a rebound in credit demand by Q4 2021. For 2022, low interest rates will continue supporting credit expansion and consumption recovery, offsetting earlier growth losses.
In Ho Chi Minh City — the economic hub most affected by the pandemic — Mr. Nguyen Hoang Minh, Deputy Director of the SBV’s local branch, reported that credit growth slowed in Q3 but remained stable in long-term lending. He expects a rebound in Q4 as the city reopens and businesses resume operations.
“Interest rate cuts, fee reductions, and debt restructuring under Circular 14/2021/TT-NHNN will help businesses overcome difficulties and recover,” Mr. Minh said.
“The banking sector will also continue dialogue programs connecting banks with enterprises to ensure policies are effectively implemented.”
SBV Governor: Maintaining Stability Amid Global Risks
SBV Governor Nguyen Thi Hong emphasized that 2021 has been a challenging year for Vietnam’s economy due to the pandemic. Yet, thanks to strong government coordination, the country’s macroeconomic stability remains intact with several bright spots:
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Low inflation, stable monetary and foreign exchange markets;
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Positive balance of payments supporting foreign reserves;
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Controlled public debt, fiscal deficit, and external debt at safe levels;
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Favorable lending rates and ample liquidity within the banking system.
However, the Governor warned of potential risks: rising global inflationary pressures, possible trade balance shifts, and increasing non-performing loans (NPLs) as borrowers face repayment difficulties.
“From now until the end of the year, the SBV will persist with policies aimed at controlling inflation, maintaining macro stability, and ensuring system safety,” Governor Nguyen Thi Hong affirmed.
“While supporting businesses and citizens, we must remain vigilant against inflation risks. The SBV will continue to manage monetary policy tools flexibly to stabilize exchange rates and the foreign currency market.”