The State Bank of Vietnam (SBV) has announced it will restructure loans for businesses, such as deferring loan repayments by up to a year, in an attempt to bolster the economy.

According to a statement, the country’s central bank said the restructuring plans would be applied up until June 2024.

Over the weekend, Vietnam’s prime minister Pham Minh Chinh asked the central bank to outline a plan to target more businesses for loan restructuring and increase the timeframes, said a government statement.

Numerous firms in Vietnam have faced difficulties with weakening global demand. In Q1 this year, exports declined 11.9%, Reuters news agency reports.

In addition, the country’s economic growth decelerated to 3.32% in the first quarter, compared to 5.92% year-on-year growth in Q4 last year. In March, the central bank slashed several policy rates to boost growth.

Furthermore, the PM said over the weekend that the central bank called for commercial banks to cut lending interest rates to support households and businesses, as per a government statement.

Pham Minh Chinh also urged the central bank to support the local corporate bond market by adjusting current bond regulations to “facilitate credit institutions to invest in corporate bonds to increase supplies and liquidity.”

Back in February, Vietnam’s Ministry of Finance said 285.2 trillion Dong ($12.04 billion) worth of corporate bonds would mature in 2023, 42% of which were issued by real estate developers.

Over half of these bonds are scheduled for repayment between May and August this year, according to data from the central bank and Hanoi Stock Exchange, the Reuters report adds.

PwC last week questioned the financial viability of No Va Land, one of the country’s top property developers, which is facing substantial bond paybacks in 2023 during difficult market conditions.