VASEP petitioned SBV to extend foreign currency loans

News 10:26 11/01/2013 Kim Thu
(vasep.com.vn) Associations represent local seafood and furniture exporters requested the State Bank of Vietnam (SBV) to allow them to access foreign currency loans until the end of December 2013.

From January 1st 2013 onwards, the Decision No. 857/QĐ-NHNN will be invalid. It means that exporters can not access to short-term loans in foreign currencies. It will hit heavily exporters of agricultural, forestry and aquatic products in 2013. Therefore, Associations represent local seafood and furniture exporters requested the State Bank of Vietnam (SBV) to allow them to access foreign currency loans until the end of December 2013.

The Circular No. 03/2012/TT-NHNN will be enforced after the Decision No. 857 is expired. The enforcement of the Circular is expected to create more burdens to exporters, especially seafood ones. They lose chance to borrow foreign currency with low interest rate. Thus, they will get into more critical situation in the times of ongoing global economic crisis.

Exporters are accessing foreign currency loans with the annum interest rate of 6.5-7.5 percent.

Thanks to foreign currency loans at low interest, seafood companies would be able to balance their finance, have capital for remaining fish production, reduce their product’s price, improve their competitiveness, said VASEP's Secretary General Truong Dinh Hoe.

In 2013, seafood exporters will have to compete stronger with each other due to economic slowdown in key importing markets.

VASEP made a proposal to SBV asking it to extend the enforcement of the Decision No. 857 until the end of 2013 and delay the application of the Circular No.03 that aims to tighten lending in foreign currencies by credit institutions so that seafood processors can access the low interest loans.

The new circular should be applied until euro zone economy starts recovering after crisis and Vietnam seafood exporters overcome difficulties and stabilize their production.

The enforcement of the Circular No. 03 will be more rational when interest rate of VND will be lowered to 8-10 percent per year. It means that the interest rate difference between VND and foreign currencies will be lower.

Besides VASEP, Binh Duong Furniture Association (BIFA) and Ministry of Industry and Trade recommended SBV to delay the application of the Circular No.03 until 2014.

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