Monetary policies to be managed flexibly to rein in inflation: Deputy PM

Hanoi (VNA) – Deputy Prime Minister Le Minh Khai clarified a number of issues raised by National Assembly (NA) deputies regarding banking activities on June 9 as part of the ongoing NA third meeting's question-and-answer session.

The Deputy PM cited the State Bank of Vietnam (SBV) Governor’s affirmation as saying that the increasing inflation does not come from recent monetary policies, especially in the first five months of this year, but from the rise in prices of commodities.

He said that the Government will continue to stick to NA resolutions and keep a close watch on the domestic situation to manage monetary tools and policies in an active, flexible and synchronous manner, aiming to curb inflation, stabilise the monetary and foreign exchange markets, while drastically implementing monetary policy solutions to support the implementation of the socio-economic recovery and development programme.

The Government will also make sure that interest rate management will match macro balances as well as inflation and monetary policy targets, and continue to remove difficulties for and support COVID-19-hit businesses and ensure safety for banking activities, he stated.

Regarding credit room, an issue that draws NA deputies’ attention, Deputy PM asked the SBV to consider the regulations, conditions and criteria for granting more credit rooms to ensure coherence.

Over the restructuring of credit institutions, he said that legal framework in the field has been completed, resulting in positive changes in their scale, financial capacity, credit quality and operational efficiency, contributing to mobilising resources for socio-economic development, especially for prioritised sectors.

He noted that the PM has issued Decision No. 689/QD-TTg approving a project to restructure credit institutions in association with the settlement of bad debts in the 2021-2025 period, which provides many measures to enhance the efficiency and transparency of the banking sector and ensure safety for the banking system. The decision also sets targets in application of Basel II standards for banks, aiming to make Vietnam one of the four leading countries in ASEAN in the field in 2025, he added.

Mentioning measures to deal with inefficient banks, he said that so far, the Government has received directions from the Politburo for a report on the plan to settle four weak commercial banks. Accordingly, the Government will direct the SBV to give specific plans to seek approval in the time to come, he added.

Over the control of credit in securities, bond and real estate sectors, Deputy PM Khai said that the Government and the PM have equested the SBV to make sure that credit management activities fully and promptly meet the capital demand for business activities, guiding credits to prioritised sectors in parallel with tight control of risky areas./.