The International Monetary Fund has warned Vietnam that its fast-growing economy is overheating. It has advised Hanoi to adopt a more flexible exchange rate regime and to tackle imprudent lending practices by commercial banks, in order to help control inflation.

“There are increasing signs that the economy is overheating, threatening sustained economic growth in the medium term,” Shogo Ishii, the assistant director of the IMF’s Asia and Pacific department, wrote on the fund’s website.