Flexible monetary policy stablises financial system
The flexible implementation of monetary policy from the State Bank of Vietnam (SBV) contributed to stabilising the financial market from the beginning of this year.
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According to the SBV, thanks to the flexible execution of the daily reference exchange rate based on the domestic supply and demand, the world finance market, as well as the synchronous implementation of tools to support the interest rate when needed, helped the foreign currency market develop positively.
The USD/VND exchange rate in the inter-bank market reduced and fluctuated around the SBV’s new exchange rate level of VND22,300 per USD.
The market liquidity has been good and the demand for foreign currency has been met.
According to the SBV, deposit interest rates have been kept stable, reducing the pressure on the lending interest rates of credit organisations and the risk of increasing inflation.
Based on the situation of the macroeconomy, currency and inflation, the SBV maintains stable key interest rates via monetary policies to ensure liquidity and keeping the inter-bank interest rate at a low level, helping credit organisations to keep their deposit interest rate levels stable.
The synchronous implementation of solutions kept deposit interest rates stable despite increases of from 0.2-0.3% per annum in the first three months.
As for lending interest rates, despite the slight increase of deposit interest rates in the early months of the year, lending interest rates are relatively stable to assist enterprises, the State commercial banks and some joint stock banks reduced the rate for short-term loans by 0.5% and capped the rates of mid- and long-term loans to no higher than 10%.
In the remaining months of the year, the SBV will continue instructing credit organisations to implement measures to reduce interest rates for loans.
According to the SBV, the credit issued in the first half this year increased 8.16%, higher than the same period last year and is on route to achieve the yearly target of 18% to 20%.
The SBV said that in the rest of the year, it will focus on controlling credit growth to ensure safety and effectiveness. It will prioritise capital for production in agriculture, export, support industry, SMEs, hi-tech enterprises and start-ups.
