Central bank governor stresses caution in price control

Hanoi (VNA) – Governor of the State Bank of Vietnam (SBV) Le Minh Hung has urged caution in price control as there will be a great pressure for raising lending rates in the time ahead.

At the Government’s teleconference in early July, Hung said aside from existing price control measures, the prudent management of other macro-economic activities is needed to avoid affecting interest rates.

While most of capital for the economy at present comes from bank credit, demand for raising capital through Government bonds is also higher. Hence, proactive and flexible management is necessary to keep lending interest rates stable, he noted.

The six-month inflation rate at 1.72 percent is assessed as in line with monetary fluctuations since the year’s beginning, and price control work during the period has proved to suit the reality.

Hung said the SBV will keep a close watch on moves in regional and international markets, especially in the EU and the US, in order to timely adjust monetary and exchange rate policies.

With regards to the UK’s withdrawal from the EU (or Brexit), the Governor said the central bank immediately move to respond to the market’s psychological reaction, helping minimize Brexit’s impact on exchange rates and the rates are now stable.

It is still necessary to evaluate more comprehensively the indirect influence of Brexit, particularly the devaluation of major currencies like the British pound and the euro, he added.-VNA