On January 3, 2024, in Hanoi, the State Bank of Vietnam (SBV) organized a Press Conference under the chair of First Deputy Governor Dao Minh Tu to disseminate the results of the monetary policy management and the banking operations in 2023, as well as the orientations for 2024.
Deputy Governor Dao Minh Tu chairs the Press Conference
Significant results in the monetary policy management and banking operations
In his opening speech at the Press Conference, Deputy Governor Dao Minh Tu informed that, 2023 had been a particularly difficult year for the socio-economy in general and for the banking operations in particular, in light of the world sluggish growth, high inflation rates around the world, a decline in the global trade, and the geopolitical conflicts.
In response to those difficulties, the SBV Deputy Governor emphasized that the SBV had proactively monitored the macro-economic situation to promptly adjust the policies, promulgate and implement synchronous measures and instruments, contributing to maintaining the macro-economic stability, controlling the inflation at a low level, supporting the economic recovery and ensuring a prudent banking industry.
Accordingly, the monetary policy management has contributed to maintaining the macro-economic stability, controlling the inflation at about 3.25%; supporting the liquidity for the credit institutions; maintaining the stability of the forex and money markets, as well as enhancing the foreign currency purchase to increase the state forex reserves.
An overview of the Press Conference
In 2023, the SBV had cut down the key interest rates 4 times, with a reduction of 0.5-2.0% p.a. in light of the hikes in the interest rates around the world. At the same time, the SBV had requested the credit institutions to reduce their operational costs and apply consistent measures to reduce their lending interest rates. Currently, the mobilizing interest rates and the interest rates applied to new loans have decreased by about 2.0% p.a. compared to those of the end of 2022.
The SBV Deputy Governor added that up to now, the lending interest rates have been reduced to very low levels, even for the non–prioritized sectors and areas. It is said that the interest rates have decreased to the same levels as those of 20 years ago.
Regarding the credit operations, the SBV had conducted consistently and strongly many solutions, policies and credit programs, focusing all resources to ensure sufficient capital supply for the economy, promoting the economic growth rate at about 5%, lower than the set target, but still a high growth rate compared with the world, supporting businesses and the people to overcome their difficulties and recover their production and business activities.
Many credit programs have been implemented to implement effectively the social policies, such as the credit package worth VND 120,000 billion for the real estate sector; the credit package worth VND 15,000 billion for the fisheries sector. With the SBV's consistent guidance and leadership, as of the end of 2023, the credit growth rate had reached about 13.5%.
The non-cash payment indicators also grew positively. In 2023, the numbers of non-cash transactions increased by 50.3 to 99.1%, with the value increasing by 5.4 to 10.8% depending on the means of payment; the payment systems had operated stably, smoothly and safely. The banking industry is also a pioneer in the digital transformation.
The SBV Deputy Governor went on to share that apart from the challenges, there were also many advantages for the economy and also for the banking operations, which include the close and active coordination of the Ministries, agencies, local authorities, business associations, and the people in proposing and making recommendations for the management of the banking sector, as well as the collaboration of the press and media agencies in disseminating the banking policies to the people and businesses.
According to the SBV Deputy Governor, the above advantages had enabled the banking industry to maintain the achievements of 2022 and to obtain new successes in 2023.
Continue to manage the monetary policy tools in a proactive, flexible and consistent manner
The SBV Deputy Governor said that in 2024, the global economic outlook and the international markets would continue to experience unpredictable developments. The domestic economy is expected to still face many difficulties and challenges. In that context, the SBV would continue to focus on a number of key orientations and solutions.
Deputy Governor Dao Minh Tu speaks at the Press Conference
First of all, the SBV would continue to closely monitor the economic developments and the situations in the world and domestic economies to manage the monetary policy in an active and flexible manner, in close coordination with the fiscal policy and other macro-economic policies, thereby contributing to controlling the inflation, maintaining the macro-economic stability, the stability of the money and forex markets, and ensuring a prudent banking system;
Regulating the interest rates and the exchange rate in accordance with the market situations, the macro-economic developments, and the monetary policy objectives.
Implementing strongly the Scheme of Restructuring the system of credit institutions in association with NPL resolution for the 2021-2025 period; speeding up the NPL resolution; making efforts to keep the 2024 NPL ratios in the balance sheets of the credit institutions (excluding the poor-performing commercial banks) below 3%.
The SBV would also accelerate the digital transformation in the banking operations and non-cash payments, meeting the requirements for new business models, products and services on the information technology platforms, digital banking, and digital payments; Enhancing the security and safety in payment activities and the digital transformation.
In particular, in 2024, the SBV would continue to improve the banking legal frameworks to create a consistent and favorable legal basis for the management of the monetary policy and the banking operations; Coordinating with the National Assembly entities to finalize the documents for the submission of the revised Law on Credit Institutions to the National Assembly at an earliest session of the National Assembly.
Sharing more specifically about the credit operations in 2024, Deputy Governor Dao Minh Tu said that unlike other years, at the beginning of 2024, the SBV had assigned the total credit growth target of 15% to the credit institutions. This is a new approach, demonstrating the proactiveness, determination and innovation of the SBV in the efforts to promote the economic growth, enabling the credit institutions to meet their legitimate needs for capital, and promoting the total demand.
In the coming time, the SBV would continue to conduct solutions to improve the credit access for the people and businesses; manage the credit growth in a proactive and flexible manner, in accordance with the macroeconomic developments, meeting the capital demands of the economy. In addition, the SBV would continue to direct the credit institutions to focus credit on production and business operations, the priority sectors and areas, and the growth drivers (investment, consumption, export) in alignment with the Government's policy; controlling strictly credit for the potentially risky areas. Besides, the SBV would also continue to accelerate the implementation of the assigned tasks of the banking industry; creating favorable conditions for businesses and people to access bank credit, removing difficulties for and promoting the expansion of safe and healthy consumer credit, contributing to restricting "black credit".
Also at the Press Conference, Deputy Governor Dao Minh Tu and representatives from the SBV departments answered the correspondents’ questions about the monetary policy management and the banking operations in the coming time.
Le Hang