This is the statement of Governor Le Minh Hung of the State Bank of Vietnam (SBV) at the Government online conference with the cities and provinces to evaluate the situation in the first 6 months and implement the tasks of the last 6 months of 2019 in the afternoon of July 4th, 2019.
Speaking at the Conference, SBV Governor Le Minh Hung expressed high agreement with the reports by the Minister of Planning and Investment and the Chairman of the Office of the Government in the morning session. "The reports already mention the results achieved and the existing limitations and shortcomings to overcome in the last 6 months", said the SBV Governor.
Reporting more about the management of the monetary policy and the banking operations, the Governor shared that recently, the National Monetary and Financial Policy Advisory Council of the Prime Minister (the Advisory Council) met and made a detailed report assessing the current situation to the Government leaders. "The Advisory Council recommends that the Government continue to follow the major orientations of the National Assembly and the Government, and be consistent with the objectives and policy solutions set out at the beginning of the year". The Governor also affirmed that the members of the Advisory Council highly agreed on the solutions of the Government as well as the orientations for the last 6 months; and proposed that in the coming time the Government continue with such policy stance and not yet to consider to adjust the macro policies of the Government, as well as operating solutions of the ministries and agencies.
Regarding the macroeconomic management solutions, specifically on inflation control, the SBV Governor said “the report of the Ministry of Planning and Investment makes it very clear, and the SBV would like to re-affirm to the local authorities and the business community that the macro management solutions, especially the operating solutions of the monetary policy, have been going in the right direction to control inflation. Especially, we have managed to anchor the sentiment expectation of inflation, so the average core inflation in the first 6 months was kept at 1.87% on average, and we also controlled the average inflation at around 1.8%. This shows that the monetary policy operation has been going very well in the right direction, and the macro indicators and platforms have been maintained stable.”
“We affirm that with such operating solutions and close coordination of the ministries and the government instructions, we can fully control inflation in line with the target set at the beginning of the year,” according to Governor Le Minh Hung.
Sharing more about the banking activities, mainly about the interest rate management, the Governor reiterated that right from the beginning of the year, 4 state-owned commercial banks have drastically implemented the directions of the Government and the SBV Governor in reducing the lending interest rates in priority areas.
“The reduction in the lending rates is not only for new credit but also for credit outstandings in the five priority areas. This has helped reduce the costs for businesses and is the anchor to keep the lending interest rates of the banking system stable for the economy. Therefore, in the first 6 months, the lending interest rates remained stable and the lending interest rates of the 5 priority areas were reduced right from the beginning of the year”, the Governor further analyzed.
Regarding the credit management, the Governor stated that credit growth in the first 6 months was 7.33%, similar to last year's increase, “the credit structure has changed positively, and we see that the support for high economic growth comes from processing, manufacturing, and export, so credit in these areas has increased quite well”. “Under the instructions of the Government and the Prime Minister, the SBV has administered the credit for the economy very flexibly, and has timely adjusted to ensure that credit can fully meet the capital demands of the economy, but still able to control the macro stability. We must affirm the credit quality and put credit into the priority areas as identified by the Government; strictly control the credit in the sectors that can generate risks", the SBV Governor stressed.
Regarding the recommendations of some local leaders on credit for agriculture and rural development, in particular, lendings to overcome the difficulties caused by the African swine fever (ASF) outbreaks, loans for black pepper re-plantation in the Central Highlands, the head of the banking industry responded that recently the SBV has cooperated with a number of local authorities, especially Gia Lai province, to assess the climate impacts on agricultural production, particularly black pepper production. The SBV has also proposed to the local authorities to have certain solutions in collaboration with the banking sector to resolve the difficulties for the black pepper farmers in general, and farmers in Gia Lai province in particular.
On resolving the difficulties of the livestock industry, Governor Le Minh Hung said, currently, the loan outstanding of the livestock industry is about VND 51,000 billion, in which the outstanding loans affected by the recent African swine fever outbreaks is about VND 1,200 billion.
“We have actively directed the credit institutions to restructure debts and reduce interest rates, as well as to provide new loans to support the production and business activities. In the near future, we will continue to coordinate closely with the Ministry of Agriculture and Rural Development to have further solutions; reviewing and re-assessing the impacts, if any, caused by the African swine fever (ASF) to coordinate with the Ministry of Agriculture and Rural Development, as well as the local authorities to come up with effective measures”, said the Governor.
At the Conference, Governor Le Minh Hung also shared about the loan solution to purchase rice in the Winter-Spring crop, ensuring appropriate rice prices to support farmers in the rice production.
Regarding the results achieved in non-cash payments, the SBV Governor said that in the first 6 months of the year, the non-cash payment system has grown positively, in which the banking system has been collaborating closely with the Ministry of Finance, including the Customs and the Treasury, to provide electronic connections down to district level. In addition, the Ministry of Health has also directed the hospitals to further coordinate with the banking system to provide non-cash fee collection services. "In the coming time, the SBV also wishes that the cities and provinces will continue to coordinate with the banking system to provide cashless payment services in their localities", said the Governor.
With the above-mentioned results, the Governor affirmed that in the coming time, the banking system will continue to have necessary activities to support sustainable economic growth of the cities and provinces, as well as to ensure the macro balances to maintain an enabling business environment for the business community.
VA