The State Bank of Vietnam (SBV) organized a press conference on the results of monetary policy management and banking operations in the first half of 2015 in Hanoi on June 22. The press conference was under the chairwomanship of Deputy Governor Nguyen Thi Hong, and attended by senior leaders of several SBV entities.
At the press conference, Director General Bui Quoc Dung of the Monetary Policy Department said that, in the first six months of 2015, the SBV has implemented monetary policy tools in a flexible and consistent mannner, mainly through open market operations to regulate the money supply at a reasonable level for providing credit to the economy, supporting the liquidity of credit institutions, stabilizing the money and forex markets. By June 15, 2015, the total liquidity increased by 4.88%, mobilizing funds rose by 4.37% as compared to end 2014. The liquidity of the entire banking system was stable. The key interest rates, the ceiling VND mobilizing interest rate, USD mobilizing rates, and the ceiling VND lending rate for short-term loans for priority fields remained stable. The lending rates was adjusted for several credit programs, down by 0.5 -0.6 percentage point p.a to 6.5% - 6.6% for better supporting several specific sectors; through monetary policy tools to regulate liquidity of credit institutions at a reasonable level, thereby lowering interest rates. The common interest rate for the first 6 months continued to decline by 0.2-0.5 percentage point p.a as compared to that of the previous year. In particular, the mobilizing interest rates for over 6 month terms decreased by 0.2-0.5 percentage point p.a, thereby supporting for a reduction in lending interest rates for medium and long term loans. The lending interest rates decreased by 0.2-0.3 percentage point p.a to 6-9% p.a for short-term loans and 9-11% p.a for medium and long term loans.
Credit growth for the first 6 months of 2015 was higher than the same period of 2012 - 2014. By June 15, 2015, credit to the economy increased by 5.78% as compared to end 2014 and up by 18,98% in comparison with the same period. In particular, the rural agriculture has been the priority sector which commercial bank focused on providing loans; by June 30, 2015, lending to this sector is estimated to increased by 7.71% as compared to that of December 31, 2014. By the end of March, 2015, the results of loan provision to priority sectors as follows: loan outstanding for export increased by 3.9%, for small and medium enterprises increasing by 1.88%, for development priority industry increasing by 0.2%, and for high-tech enterprises rising by 24.02% as compared to that of end 2014.
For exchange rate management, on the basis of macro-economic developments, foreign exchange in the international and domestic market, and the socio-economic development objectives for 2015, the SBV proactively adjusted the average inter-bank VND/USD exchange rate up by 2% (1% from January 7, 2015 and 1% from May 7, 2015); synchronously managing monetary policy tools to regulate liquidity at a reasonable level, supporting for stabilizing the exchange rate, flexibly implementing measures of foreign currency buying and selling for market intervention, committing to sell foreign currencies to stabilize the VND/USD exchange rate within the set band of 2%. The VND/USD exchange rate in the market was relatively stable at the new common exchange rate and lower than the selling exchange rate of the SBV. By June 19, 2015, the inter-bank VND/USD exchange rate was around 21,805, commercial banks quoted the selling/buying VND/USD exchange rate at around 21,770-21,830. Gold market was stable, fluctuations in gold price no longer affected the forex market and the macro-economic stability. The gold market better regulated by itself, a part of gold funds has been invested in production.
At the same time, in the first 6 months of 2015, the banking industry continued to actively implement the Scheme on restructuring the system of credit institutions and NPL resolution, contributing to unfreezing credit sources. To strengthen inspection and supervision of money market and banking operations to ensure the prudent banking sector and the system of credit institutions.
To implement the objective of accelerating NPL resolution and restructuring of credit institutions, striving to decline the NPL ratio to below 3% at end 2015. In the first 6 months of 2015, the Vietnam Asset Management Company (VAMC) continued to purchase NPLs from credit institutions, implementing NPL resolution, proactively coordinating with international and domestic financial institutions and organizations as well as cooperating with credit institutions to get information, evaluating dossiers, analyzing and conducting measures to support enterprises. By June 15, 2015, VAMC approved to purchase VND 28,194 billion of principal loans outstanding (after making risk provision); since the establishment until now, the VAMC has bought 143,800 billion of principal loans outstanding (after making risk provision), contributing to supporting credit institutions decrease NPL ration, resolving difficulties for enterprises through debt reschedule, interest rate exemption and reduction...
According to the Director General of the Monetary Policy Department, in the last months of 2015, following the objectives set by National Assembly and Government, and the key tasks of banking sector specified in Directive No. 01/CT – NHNN on January 27, 2015 on the implementation of the monetary policy and safe and sound banking operations in 2015, the SBV continues to manage the monetary policy in a flexible and consistent manner in order to control inflation, stabilize macro-economy, support economic growth at a reasonable level to ensure the liquidity of credit institutions and the economy. The main orientations are as follows: flexibly managing the open market operations and interest rates in consistent with macro-economic and monetary policy objectives, and money market stability; Continuing to stabilize the exchange rate within the set band; Focusing on operating credit measures in a flexible manner towards credit extension together with credit safety and quality, ensuring the supply of credit to the economy, creating favorable conditions for getting access to bank loans; Continuing to conduct measures to closely monitor the forex market in order to stabilize the exchange rate, improve the international balance of payment, increase the state foreign exchange reserves; Focusing on conducting credit solutions to achieve the credit growth for 2015; Continuing to accelerating the restructuring of credit institution system and NPL resolution, and ensuring the prudent banking sector and reducing the NPL ratio to below 3% at end 2015.
Exchanging information with correspondents on the outcomes of credit activities in the first 6 months, Mr. Cat Quang Duong, Deputy Director General of the Credit Department stated that in the first months of 2015, the SBV continued to take several solutions on monetary, credit and banking operations, thereby facilitating enterprises, collectives and households to get access to bank loans for developing production and business; and facilitating credit institutions to extend credit in parallel with the safety and enhancement of the credit quality, ensuring the sufficient capitals for the economy and the orientation of the credit growth rate of about 13-15% with the proper adjustment based on the practical condition in order to successfully implement the goals of socio-economic development set by the National Assembly. Unlike the previous years, the credit grew up right from the first months of 2015. And by June 15, 2015 the credit increased by 5.78% as compared to end 2014 and 18.98% as compared to the same period. In the first 6 months of the year, the SBV issued many legal texts orienting the capital resources towards prioritized sectors, and proactively directing the effective implementation of specialized credit programs.
Implementing the National Assembly’s Resolution on the 2015 Plan of socio-economic development, in the final months of 2015, the SBV will continue to closely follow up the market situation, production and business of enterprises, take measures on improving the access of bank loans for enterprises and individuals. Notably, the SBV continues to control the 2015 credit growth at 13-15% and just in case for supporting the economic growth, the rate would be increased to 17%. At the same time, the SBV will reduce the NPL ratio to below 3% in end 2015….
At the press conference, SBV Deputy Governor Nguyen Thi Hong answered many questions and clarified such issued concerned by correspondents as the mobilizing and lending interest rates, the orientation of the SBV’s interest rate management in the coming time; solutions on promoting the credit growth in parallel with controlling the credit quality; managing foreign exchange and the domestic gold market: the orientation, solution on the management of exchange rate from present to end 2015; measures on speeding up the progress of NPL resolution in combination with restructuring credit institutions; advantages, obstacles, difficulties in the implementation of tasks of the banking sector in the coming time…
TLH - LVH