On December 15th, 2018 in Hanoi, the State Bank of Vietnam (SBV) held a year-end meeting with the international organizations, many diplomatic missions, bilateral and multilateral development partners, and foreign credit institutions (CIs) in Vietnam, as well as foreign experts who have working relationships with the SBV.
SBV Governor Le Minh Hung extends the warmest regards and best wishes for a Merry Christmas and a Happy New Year
The meeting was attended by members of the SBV Board of Management, leaders of the SBV Departments and entities, together with representatives of various international monetary and financial institutions, diplomatic missions, bilateral and multilateral partners and foreign CIs in Vietnam including the World Bank (WB), the International Monetary Fund (IMF), the Asian Development Bank (ADB), Japan International Cooperation Agency (JICA), etc.
Addressing the Year-end Meeting, Governor Le Minh Hung of the State Bank of Vietnam extended his warmest greetings for the coming festive season and best wishes for the New Year 2019 to the distinguished representatives from the international monetary and financial organizations, the diplomatic missions and the foreign CIs in Vietnam. On behalf of the SBV Board of Management, the SBV Governor highly appreciated the valuable support from the international monetary and financial organizations like the WB, the IMF, the ADB, the bilateral and multilateral development partners, and the foreign CIs extended to the Government of Vietnam (GoV) in general and the SBV in particular.
“The year 2018 is coming to the end, highlighted by evident economic recovery in many countries”, the SBV Governor emphasized. “In Viet Nam, 2018 has been marked with prominent outcomes in the economic growth, inflation control, macro-economic stabilization, maintenance of the growth momentum and remarkable reforms.”
Governor Le Minh Hung stressed: “Maintaining financial stability, funding flows in the economy make up key pre-conditions for the macro-economic stability and sustainable growth.” In 2018, the monetary policy has been managed in a cautious and flexible manner and in good coordination with the fiscal and other macroeconomic policies. During the first eleven months, the consumer price index increased by 3.59 percents on average, steadily heading toward the inflation target of under-4% set by the National Assembly from the beginning of the year. At the same time, the interest rates have been maintained at a low level, the foreign exchange and gold markets have been stabilized, helping to remove the constraints for the businesses, particularly the private sector. The credit growth has been controlled below 16%, and credit extension has been directed to the areas of production, manufacturing and processing. During the year, the foreign exchange reserve has been accumulated to a record high level, reflecting the fact that public confidence in the policies of the GoV and the SBV has been built up, providing the necessary support to other macro-economic policies in attracting foreign direct investment and enhancing the economy’s resilience to external shocks.
SBV holds Year-end Meeting with international monetary and financial organizations and foreign CIs in Vietnam
In addition, encouraging results have been seen in the banks’ restructuring and the resolution of non-performing loans. In 2018, the SBV has continued to improve the regulatory framework and mechanisms to facilitate the banks’ restructuring and non-performing loan resolution in order to ensure successful implementation of 2016 – 2020 Plan on Restructuring of the Credit Institution System and Non-performing Loan Resolution. Various regulations and legal documents have been issued and well received by the banking sector to promote prudential regulations, with the introduction of the international standards and best practices, aiming at improving the banks’ governance and risk management in line with Basel II core principles. Non-performing loans have been reduced substantially to 2.16%; the code of conduct, rule-based performance have been promoted in the banking sector, bringing about higher depositors’ confidence, further strengthening stability in the banking and financial system.
According to the SBV Governor, the said achievements could not have been made without the valuable support from all foreign partners, international organizations, embassies and diplomatic missions to the GoV in general and the SBV in particular in providing, coordinating assistance under various programs, projects, policy consultation including economic policies. The SBV Board of Management highly values the role of the foreign CIs in maintaining good compliance with the regulatory requirements, sound and safe performance, helping to promote good practices, rule-based operations and the code of conduct in the sector, contributing significantly to the soundness and stability of Vietnam’s banking and finance system. Their joint efforts have helped enormously in attracting foreign direct investment (FDI) and in communicating Vietnam’s policies to the international community, thus helping to facilitate the international integration of the banking system in particular and the whole economy in general.
Mr. Ousmane Dione – WB Country Director for Vietnam speaks at the Meeting
At the meeting, Mr. Ousmane Dione – the WB Country Director for Vietnam congratulated Vietnam on the achievements in the socio-economic development. In particular, the WB Country Director also congratulated the SBV's achievements in 2018. Mr. Ousmane Dione noted that the banking sector has played an important role in maintaining the macroeconomic stability in the context of the global and regional economic recovery, but there are still many challenges and potential risks. Specifically, in the banking sector, the SBV has taken some actions to build up its prestige and strengthen its presence as a healthy operating system, of which the most significant was the implementation of Resolution 42 and the Law amending and supplementing a number of Articles of the Law on Credit institutions. Those actions have allowed the SBV to enhance its dealing with the legal challenges related to resolving bad debts and weak CIs.
Representatives of the international monetary and financial organizations, and foreign CIs in Vietnam spoke highly of the achievements in the macroeconomic stability, especially in managing the monetary policy and restructuring the banking system in the recent years. At the same time, these international organizations also expressed their expectation that the SBV will continue to manage its monetary policy more proactively and flexibly in the coming time in order to be ready to cope with any unpredictable changes in the world as well as to contribute to the acceleration of the growth of Vietnam in a faster and more sustainable way.
Mr. Jonathan Dunn - Resident Representative of the International Monetary Fund (IMF) in Vietnam
Mr. Nirukt Sapru - Head of the Banking Working Group (BWG) speaks at the Meeting
In his speech, Mr. Nirukt Sapru - CEO of Standard Chartered Bank in Vietnam, Cambodia and Laos, Head of the Banking Working Group (BWG), pledged to continue to accompany and assist Vietnam in general and the SBV in particular in their efforts to build a sound and sustainable banking and finance system. This is one of the foundations for Vietnam to achieve its goal of becoming a modern industrialized country in the future. In particular, as members of the foreign business community which have been in Vietnam for years and have been acting as a bridge to attract investment into Vietnam, the BWG members will continue to act as brand ambassadors for Vietnam, sharing Vietnam's success stories with their customers, international investors, who are looking for the right place to invest.
According to SBV Governor Le Minh Hung, the year 2019 is approaching with new opportunities and challenges. The GoV shall stay consistent with its objectives to maintain the macroeconomic stability, accelerate the reforms of key areas and renovate the growth model in order to fulfill the set targets in the 2016 – 2020 Socio-Economic Development Plan, heading toward sustainable development. The SBV shall continue to manage its monetary policies in a cautious and flexible manner and in good coordination with other macroeconomic policies. The SBV shall strengthen its prudential supervision over the banking system to maintain the financial and monetary stability and improve the business environment.
The SBV Governor believed that the international organizations, embassies, diplomatic missions, bilateral and multilateral partners and the foreign CIs will continue to join hands and support the GoV and the SBV in a new course for new successes. At the same time, the Governor expressed his wishes that the SBV's relations with the international monetary and financial organizations will get more and more strengthened, and the operations of the foreign CIs in Vietnam in the New Year 2019 will further prosper.
VA