The Governor of the State Bank of Vietnam has said that it will be difficult to see further interest rate cuts in the near future with credit demand increasing and the risk of increased pressure on the exchange rate too great, Hanoi Moi has reported.

Conversely, Business Forum Magazine is carrying details of a recommendation from Vietnam’s National Economics University–or NEU–to the government that the state bank should ‘urgently’ reduce lending rates. Specifically, the NEU is calling for a half-a-percent cut. It also says deposit insurance rates and reserve ratios should also be reduced, and that agricultural loans should be made available at zero-percent.

On that note, Nguoi Quan Sat, has covered the 10 percent credit growth reported by the Governor, on a target of between 14 and 15 percent, that has been achieved so far this year. The Governor, however, has dampened expectations, commenting that the economy’s ability to absorb more capital is low and that people are spending less with credit demand still low.

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