Vietnam central bank plans loan restructuring for struggling businesses

A Vietnamese flag flies atop the State Bank building, near the Vietcombank and Bank for Investment and Development of Vietnam buildings, in central Hanoi, Vietnam. REUTERS/Kham/File photo

HANOI  – Vietnam’s central bank will restructure loans for some businesses facing difficulties, including delaying loan repayments, the government said, as it seeks to shore up a slowing economy.

Prime Minister Pham Minh Chinh has asked the State Bank of Vietnam to draft the decision with a view to increasing the number of firms subjected to restructuring, and extending the timeframe over which it happens, the government said in a statement at the weekend.

Several companies in Vietnam, a regional manufacturing hub, have been struggling amid weakening global demand, with exports falling 11.9% in the first quarter of this year.

Vietnam’s economic growth slowed to 3.32% in the January-March period, against a 5.92% year-on-year expansion in the fourth quarter of 2022.

Chinh at a weekend meeting with the central bank also called for commercial banks to cut lending interest rates to support businesses and households.

The central bank last month cut several policy rates to support growth amid global uncertainty.