HANOI, May 12 (Xinhua) -- Vietnam's central bank is lining up its options in case it needs to ease monetary policy further to support the economy and help the country meet its economic growth target for the year, local newspaper reported on Friday.

The State Bank of Vietnam building in Hanoi. (Photo: AFP)

"Given the U.S. Federal Reserve seen slowing its rate-hike pace, improved bank liquidity, the State Bank of Vietnam (SBV) will consider, based on the assessment of market conditions, lowering policy rates further," SBV Governor Nguyen Thi Hong told a meeting with local authorities and businesses in the country's southeastern region.

Vietnamese banks' total lending rose 3.04 percent as of the end of April from the end of last year and grew 9.92 percent from a year ago, according to the central bank.

Banks are flush with cash but struggling to boost lending to individuals and businesses on worries about slowing growth tied to a slump in exports and construction, experts said.

The central bank's governor also asked commercial lenders to cut operating costs and focus on lowering interest rates to support businesses. The call has been repeated by several senior officials after the central bank cut policy rates twice in March in an attempt to reduce the cost of funds for banks.

Vietnam's economy in the first quarter grew 3.32 percent, the second lowest quarter expansion rate since 2011, slowing from a growth of 5.92 percent in late 2022 and 5.03 percent in the first quarter last year, the General Statistics Office said.

Vietnam's gross domestic product is expected to grow 6.5 percent this year, slower than last year's expansion of 8.02 percent.

Meanwhile, inflation pressure is no longer as stressful as last year, Vietnam's consumer price index in the first four months rose 3.84 percent from a year, under the targeted annual inflation rate of 4.5 percent, according to the statistics department.