On April 3, 2020, SBV Deputy Governor Nguyen Thi Hong joined an online meeting hosted by the International Monetary Fund (IMF) and the World Bank (WB) with the leaders of the Ministries of Finance and the Central Banks of the ASEAN+3 countries, Mongolia, Timor-Leste. The participants included representatives of other international organizations such as the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB).
The purpose of the Conference is to exchange views on the impacts of the coronavirus crisis on the macroeconomics and policy developments, as well as for countries to make requests for support from the international financial institutions. The co-chairs of the Meeting were Mr. Changyong Rhee - Regional Director for the Asia and Pacific Department of the IMF, and Mrs. Victoria Kwakwa - Vice President for East Asia and the Pacific Region of the WB.
At the Conference, the representatives of the international organizations assessed that the Covid-19 pandemic has caused a great shock to the global economy, which could be even bigger and more serious than the 2007-2008 global financial crisis. So far, it has not been possible to assess all of the impacts on the various industries and sectors. However, the biggest impacts have been recorded from a significant global decline in the fields of tourism, trade, global supply chains, leading to the reversal of the capital flows in many countries and declining growths in several countries, especially the United States and many developed ones. The representatives of the Ministries of Finance and the Central Banks also made negative assessments about the impacts of the pandemic on their respective countries' economy, and updated on several policies to respond to the pandemic consequences and support the businesses, especially the small and medium enterprises, such as: loosening the monetary policy, reducing the interest rates, reducing the compulsory reserves, increasing the system’s liquidity, extending the repayment due time, etc.
The international financial institutions also provided information on the relief packages they have been providing to countries affected by the pandemic. The IMF has pledged a package of up to 1 trillion USD to help countries to respond to the emergencies, with disbursement conditions dependent on the economic situations and the severity of the disease in the respective member country. Similarly, the World Bank Group has also announced a 14 billion USD support package, of which 6 billion USD comes from the WB and 8 billion USD from the International Finance Corporation (IFC). On the side of the ADB, the organization announced a support package of about 6.5 billion USD, of which 3.6 billion USD is for Government-guaranteed financing, 1.6 billion USD for financing the non-guaranteed private sector, mainly focusing on micro, small and medium enterprises, and 1 billion USD for concessional financing through re-allocating the resources of ongoing projects.
At the Meeting, SBV Deputy Governor Nguyen Thi Hong made a remark expressing high evaluation for the role of the IMF and the WB in coordinating the policy actions, and the support from the international financial institutions through the collaboration initiatives. The SBV Deputy Governor affirmed the motto of “no one is left behind” in Vietnam’s fight against COVID-19, in order to control the spread of the disease, ensure the lives and health of the people, and to remove the difficulties for the business operations. The Government of Vietnam in general and the SBV in particular have issued many drastic and prompt policies to support the market and the businesses, such as extending tax payments, waiver of overdue payment interest for taxpayers who are impacted by coronavirus, synchronously reducing the interest rates to support production and business operations, managing the exchange rates in a flexible and proactive manner, in combination with sound measures to regulate the liquidity to stabilize the exchange rates and the foreign exchange market.
The Deputy Governor applauded the comprehensive support measures in forms of both financial support and policy advice from the IMF, the WB, the ADB and the AIIB provided to the member countries in response to the impacts of the COVID-19 pandemic, and called on the international organizations to further enhance their lending capabilities to support the member countries, as well as to consider additional financial support measures, allowing debt rescheduling, extending the fast repayment due time in order to reduce the burdens of debt repayments on those countries experiencing budget constraints from efforts in fighting the pandemic and supporting their people and businesses.
VA