On March 24, 2020, Governor Le Minh Hung of the State Bank of Vietnam (SBV) had a talk over the phone with Mr. Masatsugu Asakawa, President of the Asian Development Bank (ADB) to exchange information about the Covid-19 pandemic, as well as the ADB’s policies to support Vietnam’s Covid-19 response.
In the talk, Governor Le Minh Hung briefed the ADB President of the Covid-19 developments in Vietnam. By end of March 24, 2020, there were 134 confirmed cases of Covid-19 reported nationwide, of which 17 cases have recovered, and there has been no death. The Government of Vietnam has made enormous efforts and conducted several measures in order to contain the spread of the disease, targeting “the dual goals” of controlling the Covid-19 outbreaks while still developing the economy. Although the Covid-19 is still under control in Vietnam, the Government has precautiously worked out different scenarios in order to be ready to respond to the coronavirus.
On the SBV’s side, Governor Le Minh asserted that the SBV ensures sufficient liquidity for the market, and stands ready to intervene if necessary to stabilize the market. The SBV has also encouraged the commercial banks to be prepared to take actions to support the businesses affected by the Covid-19 pandemic. The SBV has also cut key interest rates, including the refinancing and the rediscounting interest rates, the overnight interest rate in the inter-bank electronic payments and the interest rate on loans to finance short balances in the clearing transactions between the SBV and the commercial banks. Moreover, the SBV has also directed the commercial banks to reschedule loan payments, waive and reduce the lending interest. In addition, the SBV Governor has requested the international institutions to provide financial and technical assistance to help Vietnam respond to the Covid-19 pandemic.
The ADB President spoke highly of the efforts and actions taken by the Government of Vietnam and the SBV to contain and mitigate the Covid-19 impacts. He also made high evaluation of the active cooperation of the SBV in the process of formulating policies and sharing information so that the ADB can provide timely and prompt assistance to meet Vietnam’s urgent needs.
The ADB President affirmed that the ADB is ready to assist the Government of Vietnam with finance and policy consultancy to face the current difficulties. On March 18, 2020, the ADB adopted an emergency support package of USD 6.5 billion to support its developing member countries to cope with the coronavirus. This package includes (i) USD 3.6 billion for Government lendings to respond to the health and economic consequences of the pandemic, and (ii) USD 1.6 billion for the private sector, especially small, medium and micro businesses facing difficulties due to the Covid-19 pandemic. In addition, the ADB will also provide additional support through the re-commencement of two budget-support lending programs, namely the FSDIP-SP2 and the IPEQ2 (each worth USD 100-200 million) if the Government of Vietnam agrees to implement these programs. Furthermore, the ADB President also proposed a new budget support loan worth USD 300-500 million from the emergency support package and suggested the Government to take practical steps to accelerate the disbursement of the signed projects.
The ADB President emphasized that Vietnam could consider taking advantage of the existing technical assistance to purchase equipment and gears to respond to the Covid-19 pandemic. The ADB is ready to provide more loans and technical support to assist Vietnam to purchase protective and testing materials and equipment for the fight against the coronavirus.
Governor Le Minh Hung talking over the phone with the ADB President
On this matter, Governor Le Minh Hung affirmed that the Government of Vietnam highly appreciated the ADB for its emergency support package of USD 6.5 billion in response to the Covid-19 pandemic. He expressed his support for the implementation of the budget support programs and other projects for Vietnam. As the official representative agency of the ADB in Vietnam, the SBV will coordinate closely with the relevant ministries and agencies to promptly inform the ADB about Vietnam's needs and propose possible measures to speed up the implementation of the ADB-supported programs and projects in Vietnam, as well as to accelerate the disbursement of the signed programs and projects. This is an important and timely resource to support Vietnam in its response to the coronavirus.
Le Hang