The Governor of the State Bank of Vietnam, Nguyen Van Giau answered NA deputies’ queries about interest rate subsidies and other monetary policies at the 6th session of the 12th National Assembly on Nov. 17.

Giau, the first person to take floor at the on-going session, in assessing the efficiency of the interest rate subsidy policy, said it was an optimal stimulus solution, requiring little expenditure, but yielding large positive effects.

As a result, it helped many businesses and production households to secure loans more cheaply, so they could boost production, maintain and expand their business, and generate more jobs, thus contributing to social security and preventing economic slowdown.

He also noted shortcomings during the implementation process such as the lower subsidised interest rates as compared to the rates for term deposits which forced an increase in interest rates and exchange rates.

Regarding the State management of the foreign currency market, the governor said the control of interest rates was in conformance with the Government’s target of preventing economic slowdown and the reoccurrence of inflation.

It resulted in the rational and rather stable movement of interest rates, the increasing total of means of payment and credit, in line with the Government’s policy on demand stimulus and meeting capital demand in the domestic economy. The consumer price index (CPI) for the first 10 months of this year rose by 4.49 percent.

Regarding the fluctuation in gold prices and the central bank’s response, Giau asserted that the decision to import gold is made at the right time.

After the governor’s answer, NA Chairman Nguyen Phu Trong drew the exchange to a conclusion, stressing that the financial and banking issues were the focal points of the sixth session.

He said the interest rate subsidy policy has had a positive effect on the efficiency of the stimulus packages. However, he agreed with NA deputies’ opinions on the policy’s shortcomings, including the limitations on farmers and small and medium-sized businesses in accessing capital resources.

He suggested the State Bank’s Governor to employ efficient solutions to stabilise foreign exchange rates, foreign currency and gold markets in order to obtain the target of stabilising the macro-economy and maintaining the value of the Vietnamese dong./.