(Bloomberg) -- The State Bank of Vietnam announced it is raising its credit growth limit for the banking system by 1.5-2 percentage points to boost economic growth as some companies struggle to obtain funding.

Banks with sufficient liquidity and relatively low lending interest rates will be granted higher credit quotas than others, according to a statement on the regulator’s website late Monday. Central bank Governor Nguyen Thi Hong directed lenders to prioritize lending to sectors that can help create momentum for economic growth, such as production, farming and exports.

“Increasing credit growth will go hand-in-hand with risk control to ensure businesses’ liquidity and operational safety, and solvency, especially for the Lunar New Year,” the statement said. 

The central bank, which had limited the credit growth of the banking system this year to 14%, previously increased quotas for some banks. Lending in the banking system grew 12% this year through late November, Saigon Giai Phong newspaper reported last month.

The order comes as S&P Global Ratings cautioned that highly-leveraged Vietnamese companies face difficulties servicing loans. A regulatory crackdown has dealt a blow to Vietnam’s property developers, pummeling domestic debt sales and turning local stocks into the world’s worst performers.

The central bank will closely monitor banks’ lending and will take steps to help boost liquidity in the banking system when needed, according to the statement. The regulator will also closely watch inflation and market development to work out suitable monetary measures and credit growth limit for 2023.

--With assistance from Mai Ngoc Chau.

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