Suitable financial, monetary policies needed to promote growth

Hanoi (VNA) – Management agencies need to focus on financial and monetary policies besides long-term solutions such as restructuring the economy, reforming State-run businesses, and developing private economy to promote economic growth in the remaining months of this year, heard a workshop in Hanoi on July 14.

Deputy Minister of Planning and Investment Nguyen The Phuong said the business and investment environment improved in the first six months of 2017 with the expansion of the gross domestic product (GDP) growth, stable macro-economy and curbed inflation.

Some restrictions such as high public debts, ineffective operation of State-run companies, and unsustainable growth of private businesses should be addressed, he said.

According to economists from the Academy of Policy and Development under the Ministry of Planning and Investment, financial and monetary policies are on the right track but they fail to catch up with reality.

Therefore, relevant agencies need to improve the management efficiency, especially the responsibilities of individuals and leaders, participants said.

They evaluated that the exchange rate controlling policy of the State Bank of Vietnam is suitable with the economic reality, noting that if the exchange rate is not controlled, it will pose negative impacts on the economic growth.

Experts suggested curbing the exchange rate amplitude between 2-3 percent to stabilise the monetary market.

According to Can Van Luc, a financial and monetary expert, the Federal Reserve (Fed) is likely to increase interest rates once more time in 2017 and twice in 2018.

The pursuant of high economic growth target in the short run at home and the lack of sustainable growth momentums will pose a lot of risks to the macro-economy and the financia-banking system in the long term.

He recommended taking measures to expand money supply and credit growth at a reasonable level of 16-18 percent in 2017, while speeding up the restructuring of financial credit and handling of bad debts.

Meanwhile, Nguyen Thac Hoat, a representative from the financial and monetary faculty of the Academy of Policy and Development, emphasised the need to take strong actions in the coming months to achieve growth target.

It is necessary to improve the management of exchange rates and maintain low interest rates, he noted.

Other experts suggested monitoring the credit quality and strengthening management of budget collection.-VNA