The Law on the State Bank of Vietnam 2010 stipulates: "The national monetary policy consists of national-level decisions on monetary affairs made by competent state authorities, including decisions on the objective of currency value stability which is denoted by the inflation rate, and decisions on the use of tools and measures to obtain the set objectives."
Orientations of the monetary policy management and banking operations in 2021
On the basis of Resolution No. 124/2020/QH14 dated November 11, 2020 on the Socio-Economic Development Plan for 2021, the SBV has identified the objectives and the major measures for the monetary policy management in 2021, specifically as follows:
“1. Overall goal and mission: Managing the monetary policy in a proactive and flexible manner in close coordination with the fiscal policy and other macro-economic policies in order to control inflation within the target level of about 4% for 2021, supporting the macro-economic stability, contributing to the economic growth recovery, and maintaining the stability of the forex and the money markets.
2. Specific tasks: Closely following the macro-economic developments and the COVID-19 situations in the international and domestic markets in order to actively operate appropriate tools and measures in a consistent manner in order to maintain the stability of the forex and the money markets, controlling the growth rate of the total liquidity and credit in line with the set-out direction; Managing the open market operations in a flexible manner in line with the market developments, supporting the money market stability; Regulating the interest rates to be maintained at a appropriate level in line with the macro balances, the inflation situation, the market developments and the monetary policy objectives, helping to reduce the capital cost for the people, the enterprises and the economy; Managing the exchange rates in a flexible manner in line with domestic and international market situations, the macro and monetary balances and the monetary policy objectives; Increasing the state foreign currency reserves when the market conditions are favorable; Re-financing the credit institutions to support their liquidity and provide loans to the priority programs and sectors as approved by Government and the Prime Minster; and Supporting to resolve non-performing loans (NPLs); Regulating the credit in accordance with the targeted orientations, in close combination with the credit quality improvement and NPL resolution; Periodically reviewing and considering to adjust the credit growth targets for each credit institution on the basis of their performance, financial capacity and the ability to grow credit in a healthy manner, especially focusing on priority fields; Directing the credit institutions to ensure safe and effective credit growth, prioritizing credit for production and priority fields in line with the Government's directions; Strictly controlling credit for potentially risky areas such as real estate, securities, BOT and BT projects; Enhancing risk management in lendings to support living needs and consumer credit; Creating favorable conditions for businesses and people to access bank loans, contributing to limiting black credit; Supporting and facilitating for Vietnam Bank for Social Policies to implement successfully the preferential credit programs and policies under the directions of the Government and the Prime Minister; Conducting synchronous measures to remove difficulties for the COVID-19 affected customers, supporting the mitigation of natural disaster and epidemic consequences”.
