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Vietnam remains optimistic about reaching its economic growth target this year despite the significant damage caused by Typhoon Yagi, according to Central bank deputy governor Dao Minh Tu. The country is also considering the possibility of interest rate cuts to support recovery efforts following the typhoon.

Tu mentioned at a media briefing that business and manufacturing activities are gradually recovering from the impact of the natural disaster. The State Bank of Vietnam (SBV) is committed to implementing supportive monetary policies for the remainder of the year, including keeping policy rates stable and potentially lowering Interest rates further.

Bank lending in Vietnam has increased by 9% as of the end of September compared to the previous year. The Central bank aims to achieve a credit growth of 15% in 2023, which plays a crucial role in driving the country’s economic growth.

Despite the challenges posed by the typhoon, Vietnam’s GDP grew by 7.4% in the third quarter, driven by robust performance in exports, industrial production, and foreign investment. Inflation remains under control, with Consumer prices rising by 3.88% in the first nine months of the year.

In a bid to stabilize the financial sector and address non-performing loans, Vietcombank will acquire Construction Bank, and Military Commercial Joint Stock Bank (MBBank) will take over Oceanbank. The Central bank‘s restructuring program also includes plans to resolve issues with other struggling banks like DongA Bank and Global Petro Bank.

The Central bank emphasized the importance of these takeovers in facilitating the return to normal operations for the banks, handling accumulated losses, and safeguarding depositors’ rights. Overall, Vietnam is focused on reviving the economy and ensuring financial stability in the face of recent challenges.

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