February 26, 2017 14:47

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Striving for stabilization of interest rates in 2017

08:57 | 17/12/2016

VCN - The State Bank of Vietnam (SBV) has reported the results of monetary policy in the first 11 months of 2016. The indicators are stable and within acceptable levels.

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striving for stabilization of interest rates in 2017
Generally, the management of monetary policy of the SBV in 2016 is stable, in accordance with the set objectives. Photo: H.Diu

According to the State bank, to 22-11-2016, the total means of payment increased by 14.92%, deposit growth of 15.28% compared with the end of 2015. The liquidity of the credit institutions (CIs) system is continuing to be guaranteed, the interbank offered rate is running smoothly.

Simultaneously, in general, the State bank directed the CIs to balance the capital to maintain the stabilization of deposit rates, reduce costs, improve business efficiency to be able to cut lending rates; adjust the rate of short-term capital for mid and long term lending to decrease in line with the roadmap, which helps to reduce the pressure on interest rates for credit institutions.

Thus, the stabilizing of interest rates in 2016 is a positive result in terms of the rising pressure of inflation, demand for releasing government bonds, and rising credit.

Regarding credit growth, from the beginning of the year to 28-11-2016, credit grew by 14.57% compared to the end of 2015, in which VND credit rose by 15.81%, credit in foreign currency increased by 3,49%, consistent with the anti-dollarization policy of the Government.

The SBV said, credit growth is currently at a reasonable level, the credit structure has shifted in a positive way, focusing the capital for production and the business sector, particularly in priority areas.

In the last few months, the exchange rate status has the most notable movements. Since early November, due to the international financial market volatility, psychological impact made the domestic rate increase.

However, the State bank said that the development in the exchange rate on the domestic market in November is understandable because from the beginning of 2016 the State bank has shifted to new exchange rate management that was more flexible, which is allowing daily fluctuations in the exchange rate consistent with the movements in the domestic and international market. Around the world, the US dollar and other currencies also fluctuate.

However, the State bank affirmed that, basically, the supply and demand of foreign currency in the domestic sector has no unexpected factors, high liquidity, legal foreign currency needs of organizations and individuals which CIs respond to promptly and fully.

From this basis, the State bank said that in 2017, they will continue to flexibly manage monetary policy in order to stabilize the currency market and ensure the liquidity of the system, effectively provide capital for the economy, support the exchange rate stability, facilitate to increase the State foreign exchange reserves for consistency with actual conditions and control inflation as per thetarget.

striving for stabilization of interest rates in 2017 Vietnam may tap foreign reserves to bolster currency: central bank

The State Bank of Vietnam stands ready to stabilize the dollar/dong exchange rate by selling foreign currency.

Regarding interest rates, the State bank will implement operational solutions to strive for stabilization of interest rates as in 2016.

The State bank will also continue to strictly control lending activities in foreign currency, in accordance with the policy against dollarization of the economy.

By Huong Diu / Tuan Cuong