HANOI, Nov 26 (Reuters): Vietnam's central bank is keeping its cap on credit growth, despite calls from the prime minister and business to consider lifting it, according to a statement on the government's website to the media.
The State Bank of Vietnam (SBV) introduced a 14% cap on credit growth - a key driver of economic expansion in the country - this year.
However, recent interest rate hikes, and the government's move to tighten rules on corporate bond issuance and restrict their refinancing, have left Vietnam facing a credit crunch, fuelling expectations the cap could be lifted.
"Credit growth as of now is at 11.5%, while the ceiling was set at 14%," the SBV said in the statement.
"After a thorough consideration, the SBV saw that there was still room for banks to boost lending and for businesses to access capital."
Real estate developers in particular have been pushing for looser credit policies as many are struggling to secure loans.
Prime Minister Pham Minh Chinh last week also asked the SBV to consider lifting the cap.
"The SBV will monitor the global and systematic situation closely," the SBV statement added.
Vietnam's economy has rebounded from the COVID-19 pandemic, but has recently faced numerous challenges, with weakening global demand and a strengthening U.S. dollar prompting the central bank to raise its policy rates by a combined 200 basis points and allow the dong currency to weaken against dollar.
The SBV raised the credit growth cap for some banks in September if they met certain conditions. (Reporting by Phuong Nguyen Editing by Mark Potter)