SBV asked to support prioritised sectors

 

 

Hanoi (VNA) – Prime Minister Nguyen Xuan Phuc has directed the State Bank of Vietnam (SBV) to prioritise capital for sectors with great contributions to economic growth, export, and employment such as hi-tech agriculture, and small and medium-sized enterprises.

Addressing a SBV conference in Hanoi on January 5 to launch 2017 tasks, the PM asked large banks to help businesses reduce cost, while requesting commercial banks to develop preferential credit packages for hi-tech agriculture or a type of business needed support like tourism and aviation.

He highlighted that the banking sector plays as a blood artery of the economy, hailing its significant contributions the nation’s socio-economic growth in 2016.

By the end of 2016, the sector fulfilled all monetary targets set earlier. Total means of payment increased 17.88 percent, while total mobilized capital rose 18.38 percent over 2015.

Inflation was basically reined in, and kept at 1.87 percent, contributing to maintaining the yearly CPI at 4.74 percent, fulfilling the set target of keeping the figure less than 5 percent as set by the National Assembly.

Liquidity of the banking system was ensured, while the inter-baking system operated smoothly.

After a rise of 0.2-0.3 percent in the first three months of 2014, the deposit interest rate was stable from April. Especially, a number of credit institutions even downed the annual deposit interest rate by 0.3-0.5 percent and lending interest rate by 0.5-1 percent per annum for prioritised sectors from September.

The PM lauded the central bank’s flexible and active management over monetary policies, attributing the success in keeping the inflation rate under 5 percent to the sound enactment of policies on managing State-managed goods prices and monetary governance policies.

The central bank’s prompt and suitable response also helped maintain macro-economic stability and ensure the operation of the system, he said.

However, the PM also pointed out a number of problems in banking activities, including high interest rate, high poor performing loans as well as poor performance of the system in tackling those loans.

The PM also voiced his concern about black market credits, especially in rural area, asking the SBV and localities to urgently co-work in communication activities for locals to gain thorough understanding.

He stressed that macro-economic stability continues a major task in 2017 and requested the SBV to take the pioneer role in implementing the goal by keeping inflation at under 4 percent and contributing to accomplishing the GDP growth target of 6.7 percent.

Along with managing the monetary policy in a flexible, proactive, and careful manner and closely following market fluctuations, the SBV should work to maintain the stability of the foreign exchange and gold markets, while increasing foreign currency reserve and maintaining the value of Vietnamese dong, he said.

The PM also asked the bank to improve the transparency of interest rates, while completing institutions and legal frameworks to better support the restructuring of credit organisations and ensuring safety for the banking system.

The SBV was also asked to coordinate closely with media agencies to popularise the monetary and macro-economic policies of the Party and State.-VNA