Central Bank of Vietnam sets key monetary policies by year end

Governor Hung made the point on the monetary performance by July and talked about orientations by the end of 2016.  

The SBV will continue to flexibly implement monetary and fiscal policy and cooperate with the Ministry of Finance to ensure the liquidity of credit institutions, said the Governor.

The SBV will consistently use monetary policy to stabilize interest rates and reduce the lending rates pressures.

Governor Hung said that the SBV has also directed commercial banks to continue to simplify administrative procedures, reduce costs, and increase effectiveness of credit capital; and coordinated with localities to promote the banking business connection program.

Talking about real-estate credit, The SBV will coordinate with other agencies to focus on reviewing the sectors which have potential risks or banks which have high real-estate credit proportions.

The SBV affirmed to keep maintaining stable interest rate, liquidity, and forex market.

Regarding the forex market, the SBV will continue to keep foreign exchange reserves at a high level and flexibly adjust the exchange rate in line with the market movements; stand ready to respond to  rapid and sudden situations, keep a close watch on the forex maket, and strive for fulfilment of macro-economic norms.

Stable credit growth in the first seven months

In particular, as of July 20, the total means of payment increased by 9.84% compared to December of 2015, capital mobilization increased by 10.17%,  credit growth was estimated to increase by 8.02 % against the same period last year.

Despite the sharp increase in the total means of payment, interest rates were stable showing that the inflation pressures were still suitable with monetary market movements.

The credit growth in the first seven month was higher than the same period, having positive effects on production and economic growth, Hung assessed.

Foreign currency interest rates have increased over the last two months after the SBV allowed credit institutions to lend short-term foreign currency to support export activities.

Notably, the proportion of medium and long-term loans had a high increase rate, at more than 10%, which supports economic growth in the medium and long term.

To implement the direction of the PM, the SBV also issued Circular No. 25/2016/TT-NHNN which amends some articles of Circular No. 11/2013/TT-NHNN to extend the deadline for the VND30 trillion loan package for low-income housing program.