The US Federal Reserve’s July interest rate rise by 0.25 percentage points, resulting in policy rates reaching a 22-year high, may not be the end of the matter given the recent trend of continuously lowering interest rates.
Vietnamese businesses anticipate some relief as the central bank slashes interest rates, with credit growth expected to accelerate in the second half of 2023.
Banks have experienced a significant bad debt formation while implementing strict provisioning to control non-performing loans amid pandemic struggles – however, debt restructuring portfolios will slightly increase in 2021 as related conditions are expanded.
How Circular 03 on debt rescheduling and rates exemption affect to Vietnamese banks 18:20 | 06/05/2021
Vietnamâs central bank has recently extended the roadmap for commercial banksâ debt rescheduling and provision in a bid to support vulnerable customers hit by the pandemic. Nguyen Thi Phuong Thanh, financial analyst at VNDIRECT, wrote about how loosening the schedule would support banks to retain earnings growth and assure capital safety.
On April 2, the State Bank of Vietnam (SBV) officially promulgated Circular No.03/2021/TT-NHNN, announcing additional conditions for debt restructuring and extending the roadmap for restructuring debts provisions until 2023. Specifically, the SBV enables credit institutions to reschedule debt repayment terms for debts incurring repayment obligations from January 23, 2021 to the end of this year.