VCN- In 2016, the State Bank of Vietnam operated money supply reasonably, stablized interest rates, reduced lending rates and supported the Government to issue Government bonds at low interest rates as well as controlling exchange rates and inflation.
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At a press conference on results of operations in 2016 and tasks for 2017 of the State Bank of Vietnam in Hanoi on 4th January 2016, regarding the operating situation of monetary policy in 2016, Mr. Nguyen Duc Long - the Deputy Director of the Monetary Policy Department said that to 29th December 2016, the total means of payment increased by 17.88% and deposits increased by 18.38% compared to the end of 2015. The liquidity of the system was guaranteed with an excess and the interbanking market still ran smoothly.
Regarding interest rates, the State Bank of Vietnam has instructed credit institutions to implement measures to stabilize deposit rates and reduce costs. Therefore, after an increase of 0.2 to 0.3% per year in interest rates in the first 3 months of 2016, interest rates stabilized from April 2016. Especially from mid-April 2016 to late September 2016, a number of banks’ rates fell by 0.3-0.5% per year in deposits and fell by 0.5-1% per year in lending rates for priority businesses.
According to the State Bank of Vietnam, compared to the beginning of 2016, the exchange rate of VND/USD has increased by 1.1-1.2% with a good liquidity and the demand for foreign currencies has responded promptly. With the announcement of a central exchange rate to be flexible with the international market, the domestic exchange rate still quickly stabilized regardless of many changes. Therefore, the speculation of foreign currencies was reduced and the State Bank of Vietnam easily bought a large amount of foreign currencies to reserve for the State budget.
Regarding credit, according to Mrs. Nguyen Thuy Hanh, the Deputy Director of Credit Department, in 2016, the State Bank of Vietnam directed credit institutions to promptly improve quality and reduce risks of credit in real estate and BOT. To 29 December 2016, the credit increased by 18.71% compared to the end of 2015.
Also at the press conference, regarding the management of monetary policy in 2017, Mrs. Nguyen Thi Hong, the Deputy Governor of the State Bank of Vietnam said that in 2017 there would be many challenges related to inflation as well as big fluctuations in the global economy, therefore, the State Bank of Vietnam would allow credit growth to be at 18% and the total means of payment in the interbanking market would increase by 16-18%. Depending on actual situations, the State Bank of Vietnam will make appropriate adjustments to meet the target set by the National Assembly.
In particular, the State Bank of Vietnam will still strive for a stable interest rate as in 2016 and reduce lending rates. In 2017, the State Bank of Vietnam will continue to operate through the interbanking market, so that commercial banks can easily borrow from each other instead of raising capital when facing problems of capital. The State Bank of Vietnam has also instructed commercial banks to construct and balance a reasonable source of capital to cut interest rates. In particular, credit institutions should strengthen risk provisioning for bad debts to effectively address problems related to bad debts, reaching the efficiency of management of interest rates.
Regarding exchange rates, Mrs. Nguyen Thi Hong said, this year, the State Bank of Vietnam would keep the same operation of exchange rates as in 2016. However, the economic and political fluctuations in the world will impact the expectation of the domestic market, so the State Bank of Vietnam will closely monitor market development, to be ready for contingency plans.
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Speaking to a reporter of the Customs Newspaper about a 50,000 - 60,000 billion vnd credit package for agriculture proposed by the Prime Minister, Mrs. Nguyen Thi Hong said that the State Bank of Vietnam studied how to implement and mobilize capital from commercial banks, mainly from the Bank for Agriculture and Rural Development (Agribank). The State Bank of Vietnam has also proposed to the Ministry of Agriculture and Rural Development to assess criteria for high-tech agriculture, so that commercial banks can provide specific capital, effectively.
By Huong Diu/ Hoang Anh