A large field in southern Hau Giang province’s Vi Thuy district. The central bank’s lending this year will focus on the Government’s priority sectors, such as agriculture, exports, spare-parts industries, small- and medium-sized enterprises and hi-tech firms (Source: VNA) Hanoi (VNA) - Prime Minister NguyenXuan Phuc has required the State Bank of Vietnam (SBV) to enhance inspectionand supervision to ensure the safety of the banking system and increase theconfidence of people in the system in 2018.
At the January 9 meeting to review lastyear’s performance and prepare for implementing tasks in 2018, the PM alsoinstructed the banking industry to boost the restructuring of ailing creditinstitutions.
Besides ensuring the consumer price indexof below 4 percent, the SBV must also further cut lending interest rate andboost consumer lending this year, Phuc said.
He also required the central bank to createfavourable conditions for local commercial banks to enhance financial statusand operational efficiency, aimed at having a Vietnam bank, either State-ownedor private, at the regional level soon.
The Prime Minister has so far entrusted twodeputy prime ministers of Vuong Dinh Hue and Trinh Dinh Dung as well as the SBVto scrutinise the forecast for the real-estate market after 2019 to help theGovernment actively have suitable policies for the market.
The SBV also needs to soon have regulationsto manage the cryptocurrency as instructed by the Government, Phuc said.
At the meeting, Phuc also appreciated theachievements of the banking industry last year, which contributed significantlyto the country’s 6.81 percent GDP growth.
He said that the central bank boughtanother 1 billion USD for the past few days, raising the nation’s total foreignreserves to new record high of 53 billion USD.
“High foreign reserves, low inflation andsuitable forex policy have helped enhance Vietnam’s prestige and the confidenceof investors, firms and the people,” he said.
At the meeting yesterday, SBV alsoannounced its key monetary management policies for 2018 with a focus onmacro-economic stability.
SBV Governor Le Minh Hung said that SBVaimed to pursue a proactive and flexible monetary policy to cut interest ratesto support local firms, besides stabilising foreign currency and gold markets.
The monetary policy in 2018 would work inclose conjunction with fiscal and other macro-economic policies in a move tocontrol inflation and support economic growth at a reasonable level, he said.
“Right after the meeting, the central bankwill issue Resolution 01 on implementing tasks of the banking sector in 2018,in which it will instruct credit institutions to consider a rate cut forlending interest,” Hung said, adding the central bank will also cut the lendingrate in the OMO (open market operations) market to aid the institutions.
The central bank announced a credit growthtarget of 17 percent for 2018, lower than the 18.17 percent last year. It will,however, closely monitor the market to make suitable adjustments from time totime.
SBV stated that lending next year wouldcontinuously focus on the Government’s prioritised sectors, such asagriculture, exports, spare-parts industries, small- and medium-sizedenterprises and hi-tech firms, while limiting the capital to risky industriessuch as real estate, securities and consumer lending.
As lending in foreign currencies wouldcontinue in 2018 as per a recent circular, SBV said it would strictly controlsuch kind of lending to ensure the country’s de-dollarisation policy.
After raising Vietnam’s foreign reserves tomore than 53 billion USD to date this year - a record high in recent years -SBV affirmed it would continuously try to increase the country’s foreignreserves this year besides supporting efforts to stabilise the forex market.
Measures will be also taken to stabilisethe monetary market and ensure liquidity of the banking system, the centralbank has said, adding it will continue the restructuring of credit institutionsand settle non-performing loans.
Assessing the monetary policy management in2017, Governor Hung said owing to a good foreign currency supply source and aflexible daily reference exchange rate policy, SBV continued the purchase offoreign currencies in 2017, helping the nation’s foreign reserves to hit a newrecord of more than 53 billion USD.
Hung quoted Bloomberg’s assessment whichreported that the Vietnamese dong was one of the most stable currencies in Asiain 2017.
According to him, liquidity of the domesticforeign exchange market last year was good and met the legal demands of localorganisations and individuals.
With the synchronous and flexiblemanagement of gold-trading activities in accordance with the Government’sDecree 24, the gold market last year continued to be relatively stable, with adecreasing demand for gold bars in the local market, said Hung.
"Last year, the local market did notsee any gold fever and speculation as in previous years, which causedinstability in the local foreign exchange market and the country’smacroeconomy. Gold holders converted a part of their gold into the đồng for thecause of socio-economic development," he said.
According to Hung, the successful monetarymanagement policy last year also contributed to maintaining basic inflation at1.41 percent, helping the banking system cut lending interest rate by 0.5-1percentage points in 2017. - VNA
VNA
