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Enterprises shift to dollar loans for lower rate
Saigon Times - 3/10/2010 8:06:51 AM
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Ly Xuan Hai, general director of Asia Commercial Bank (ACB), said some banks had increased borrowing dollar rates to attract funds for lending. He added that ACB’s dollar credit had increased due to the currency’s lower lending rate. 

Currently, U.S. dollar lending rates at banks range from between 5.5% to 7% per year. However, some lenders offer 3.5% to 4.5% per year to big corporations. Meanwhile, enterprises who borrow Vietnam dong will have to pay 15% to 18% annually in interest inclusive of bank fees.

Nguyen Quoc Sy, deputy general director of Western Commercial Bank, said that the majority of their customers taking out loans in U.S. dollars were exporters, who have the greenback to refund such loans.

“Importers have to consider taking out U.S dollars loans as they cannot control forex risks. Also, they can’t be sure that they can buy dollars from the bank for payment,” he said.

Nguyen Hoang Minh, deputy director of the Central Bank’s HCMC Branch, said the high credit growth had occurred because more enterprises were allowed to borrow foreign currency.

According to the central bank, as of late February total mobilization of the city’s credit institutions fell 0.45% compared to late last year due to high lending rates.

Vietnam dong mobilization fell 1.3% while the U.S. dollar rose 1.77%. In addition, Vietnam dong credit growth decreased 0.35% as dollar loans rose 2.48%.

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