On June 15, 2022, in Hanoi, the State Bank of Vietnam (SBV) organized a Press Conference under the chairmanship of First Deputy Governor Dao Minh Tu to disseminate the results of the monetary policy management and the banking operations in the first half of 2022, as well as the orientations for the tasks during the remaining months of the year.
Controlling the inflation, contributing to maintaining the macro-economic stability
Speaking at the Press Conference, First Deputy Governor Dao Minh Tu shared that, in the first 6 months of 2022, apart from a few favorable conditions, the SBV has had to face many difficulties in the management of the monetary policy. The biggest difficulty is the emerging risks of inflation. The financial and monetary situations in many countries have experienced big fluctuations, causing a high pressure on Vietnam’s economy. In that context, the management of the monetary policy in Vietnam has still remained stable. Vietnam’s inflation rate in May 2022 was only 2.25%, with the increase mainly caused by the rising oil prices.
Implementing the directions of the Government and the Prime Minister in Resolution No. 01/NQ-CP dated January 8, 2022, Resolution No. 11/NQ-CP dated January 30, 2022 on the Socio-economic Recovery Program, Resolution No. 43/2022/QH15 dated January 11, 2022 on the fiscal and monetary policies to support the Socio-economic Recovery Program, in the first months of 2022, the SBV has urgently and promptly conducted all of the assigned tasks.
According to the SBV Deputy Governor, in the first 6 months of 2022, the SBV has continued to manage the monetary policy in a proactive and flexible manner, in close coordination with the fiscal policy and other macroeconomic policies in order to control the inflation within the set target, maintaining the stability of the money and the foreign exchange markets, while still standing ready to provide adequate capital resources for the recovery process and the economic growth. The SBV has regulated the open market in an active and flexible manner, ensuring liquidity for the credit institutions, contributing to maintaining the stability of the money market.
An overview of the Press Conference
About the interest rate management, although there has been pressure from the trend of loosing the monetary policy and increasing the interest rates around the world, the SBV has continued to maintain the key interest rates in order to enable the credit institutions to access capital resources from the SBV with low costs, thereby helping to reduce the lending interest rates for their customers for the recovery of production and business activities.
Credit growth in line with more positive developments of the economy
About the credit operations, Deputy Governor Dao Minh Tu shared that right at the beginning of 2022, the SBV had directed and oriented the credit flows to focus on production and business activities, the priority fields, controlling credit for potentially risky areas. As of June 9, 2022, the outstanding credit of the whole economy increased by 17.09% in comparison with the same period of 2021, and in accordance with the more positive developments of the economy; thereby, contributing to boosting the economic activities, creating a strong momentum for the recovery of the macro indicators, thus helping to recover and develop the economy.
The SBV has also implemented various robust solutions to support the COVID-19 affected people and businesses, meeting the capital demand for production and business activities through the rescheduling of debt repayment terms, exemption and reduction of banking interest and fees; maintaining the debt classifications; implementing a program on providing loans for the payments of workers’ salaries and job suspension benefits; the solutions on the exemption and reduction of payment service fees, etc.
According to some reports of the banking sector, as of the end of April 2022, the accumulated loan outstanding since the issuance of Circular No. 01/2020/TT-NHNN had reached over VND 695 trillion for a total of over 1.1 million customers. The outstanding balance of the debt categories that have been remained unchanged was estimated at more than VND 198 trillion for nearly 680,000 customers; the accumulated loan outstanding that has benefited from the interest and fee exemption and reduction with the debt categories remained unchanged was VND 91 trillion 490,000 customers. The loan outstanding that has benefited from the interest exemption and reduction with the debt categories remained unchanged was VND 18 trillion for more than 166,000 customers.
Implementing Resolution 11/NQ-CP dated January 30, 2022 of the Government, the State Bank has issued the Action Plan of the Banking sector to implement Resolution 11; submitted to the Government for promulgation Decree No. 28/2022/ND-CP dated April 26, 2022 on preferential credit policies for the implementation of the National Target Program for the Socio-economic Development in the Ethnic Minority and Mountainous Areas in the 2021-2030 period; finalized and submitted to the Government for promulgation Decree No. 31/2022/ND-CP dated May 20, 2022 on interest rate support from the state budget applicable to the loans of enterprises, cooperatives and business households. In addition, the SBV has issued Circular 03/2022/TT-NHNN providing guidance for the commercial banks’ implementation of the interest rate support in line with the Government's Decree. On May 27, 2022, the SBV held a virtual Conference on the implementation of the 2% interest rate support program from the State budget worth VND 40 trillion in line with Decree 31/2022/ND-CP of the Government and Circular 03/2022/TT-NHNN of the SBV.
Non-cash payment achieved high growth rate
In payment activities, the legal frameworks and policies have continued to be reviewed and improved, creating favorable conditions for non-cash payment development and digital transformation. The digitalization in the banking sector has continued to be strengthened. In the first four months of 2022, non-cash payment increased by 69.7% in the number of transactions, and by 27.5% in the transaction value; transactions via the internet increased by 48.39% in the number of transactions, and by 32.76% in the transaction value; transactions via smart phones rose by 97.65% and 86.68% in the number and value of transactions respectively; and the transactions via QR code increased by 56.52% and 111.62% in the number and value of transactions respectively, as compared to the figures of the same period of 2021; the total number of activated e-wallets increased by 10.37% as compared to that of the end of 2021.
The communication activities and financial education have been enhanced through many programs which have received high attention from the public, such as “Smart Money”, “Holding the purse-strings" TV shows, contributing to improving the knowledge and skills for the people when using financial services, thereby promoting cashless payment and financial inclusion.
The restructuring of the credit institutions in association with the NPL resolution has continued to be implemented actively. The stability and safety of the system of credit institutions have been maintained. The size of the credit institution system has continued to increase; the financial capabilities, the governance and management quality have all been steadily strengthened in compliance with the international practices.
Deputy Governor Dao Minh Tu chairs the Press Conference
Closely monitoring the market developments to manage the monetary policy in a consistent and flexible manner
Sharing about the monetary policy management in the coming time, Deputy Governor Dao Minh Tu asserted that, following the Government’s directions and the objectives in the Socio-economic Recovery Program for the 2022-2023 period, the SBV would continue to monitor closely the developments in the international and domestic markets, as well as the disease situations in order to manage the monetary policy in a consistent and flexible manner, in close coordination with the fiscal policy and other macro policies in order to control the inflation, maintain the macro-economic stability, support the economic recovery and adapt promptly with the market developments, etc.
Also at the Press Conference, Deputy Governor Dao Minh Tu and representatives of several SBV Departments and agencies provided answers to several questions raised by the correspondents related to the monetary policy management and the banking operations.
Le Hang