Moves to curb inflation may hurt loans: Bank

Saturday, April 26, 2008
Moves to curb inflation may hurt loans: Bank
The loan market could be hurt by speculation that the government plans to tighten credit to slow inflation, the Viet Nam Bank for Industry and Trade has warned.
“The credit and capital markets may face difficulty because of government policy in the months ahead,” Nguyen Anh Tuan, deputy director of the banking division at the bank, known as VietinBank, said in an interview on the sidelines of a conference in Hanoi Thursday.
April inflation rose to 21.4% year-on-year, prompting speculation the government may ramp up measures to slow lending.
The central bank has raised benchmark interest rates this year, told banks to raise the amount of compulsory reserve, and sold more bills and bonds to drain liquidity to slow inflation.
Viet Nam has limited liquidity, a small number of banks with branches in the country, withholding tax on interest and competing sources of debt capital, Ana Dhoraisingam, Singapore-based regional head of syndication at Australia & New Zealand Banking Group Ltd. told the Hanoi conference. (Bloomberg)