Central bank to keep proactive, flexible monetary policy

For the time ahead, the State Bank of Vietnam (SBV) will keep a proactive and flexible monetary policy basing on market developments and forecasts for the macro-economy, SBV Deputy Governor Dao Minh Tu told a meeting on April 22.

This monetary policy is meant to control this year’s inflation within the targeted ceiling of about 4%, support macroeconomic stabilisation, assist economic recovery, ensure liquidity, maintain the stability in the monetary and forex markets, and create conditions to reduce capital expenses for people, businesses, and the economy as a whole, the official said.

The SBV will maintain a close watch on domestic and foreign macro-economic and monetary changes, foreign exchange rate developments, as well as foreign currency demand and supply to set appropriate exchange rates, he noted, adding that it will uniformly carry out measures and policy tools to stabilise exchange rates and the forex market to help ensure macro-economic stability.

Besides, credit provision will be boosted, especially for priority fields to match economic restructuring and help fuel growth and stabilise the macro-economy.

Tu also stressed the need to tighten control over credit for high-risk areas like real estate, transport projects in build-operate-transfer (BOT) and build-transfer (BT) formats, and securities while at the same time taking synchronous solutions to tackle difficulties facing those hit hard by the COVID-19 pandemic and natural disasters.

The central bank will order credit institutions to facilitate people and enterprises’ access to credit to help minimise loan-sharking, he said.

Pham Thanh Ha, Director of the SBV’s Monetary Policy Department, reported a credit growth rate of 3.34% as of April 16, compared to the end of 2020, pointing out that the credit growth has begun stagnating as credit has increased by just 0.41% in half a month though the rise was 0.76% in January, eased slightly to 0.66% in February due to the COVID-19 resurgence, and surged by 2.93% in March.

The SBV affirmed that since the year’s beginning, it has flexibly and synchronously used monetary policy tools to ensure liquidity for the banking system, stabilise the monetary market, and help reduce input cost for credit organisations, thereby easing the pressure on deposit and lending interest rates.