VINACHEM

Creditinstitutions described adjustments in prices of the items subject toState management as the greatest risk to inflation control in 2013, theMonetary Statistics and Forecast Department of the central bank said.

Asper a report on the latest survey of credit institutions done by thedepartment, price adjustments are believed to have the biggest impact oninflation this year. The other factors are changes in monetary andfiscal policies.

Efforts to curb inflation in 2013 heavily dependon price stabilization of the items on the State control list, said thesurveyed credit institutions.

Inflation control is believed tobe a tough challenge, especially when the Government’s Resolution 01aims for CPI rise of 6-6.5%, lower than the 6.81% in 2012, and GDPgrowth of 5.5%, versus 5.03% last year.

Nearly 90% of therespondents believed inflation would be kept at a single-digit levelthis year. About 70% of them expected a rate of 5-10%.

Therefore,they hoped both deposit and lending rates would go down further. Nearly70% expected deposit and lending rates for Vietnamese dong to fall atmost two percentage points.

Credit institutions thought theinter-bank exchange rate would stay stable or just inch up. Most banksforecast the rate would go up 1-3%.

Only 17% of the respondentssaid the business environment would be favorable to their operations inthe first half of 2013. However, they hoped the situation would improvein comparison with 2012.

Some 60% of credit institutionscomplained they were adversely affected by the business environment inthe second half of 2012, while only 20% said so in the first half of theyear.

The majority of the respondents hoped their pre-taxprofits this year would be higher than in 2012, with most expecting a20% growth in profit, says a report on the Government web portalchinhphu.vn.

Credit institutions are affected the most bybusiness and financial conditions of their clients. Around 85% predictedrisk from clients would not lessen in the first half of 2013.

Most banks hoped credit growth would be better than in 2012. The majority of them eyed growth of 10-20%.

Depositgrowth was expected to be consistent with credit growth. The surveyrespondents forecast deposits in Vietnamese dong would be higher thanthose in foreign currencies.

In addition, credit institutionssaid they would prioritize funds for the key sectors such asagriculture, export, supporting industries and small and medium-sizedenterprises. They would limit credits for real estate and stocks.

Creditinstitutions remained cautious about the economic situation and theirperformance in 2013, but they still hoped for improvement.

Thesurvey respondents hoped the central bank would slash interest rates toreasonable levels, strictly handle the credit institutions breaching theinterest rate caps and create a healthy environment for monetaryoperations.

Since the fourth quarter of 2011, the central bankhas inspected credit institutions every six months to detect changes inthe business cycle earlier than the official statistics, serving themaking of the monetary policy and the management of the central bank.

Findingsfrom the survey on factors triggering high inflation are largelysimilar to remarks by the National Financial Supervisory Commission in areport released in Hanoi on Monday.

As covered by the Daily onTuesday, price management policies are the key factor for curbinginflation this year while impacts of other macro elements would not besignificant.

The commission therefore called for relevantauthorities to attend to measures to ensure stable prices of essentialcommodities, especially those on the State control list like power,fuels, and public services.