On December 9, 2022, in Hanoi, Governor Nguyen Thi Hong of the State Bank of Vietnam (SBV) hosted the Year-end Get-together event between the SBV and the international financial/monetary institutions in Vietnam.
Expressing her warm welcome to all of the participants at the traditional Year-end Get-together event of the banking sector with the foreign partners after the two- year disruption due to the COVID-19 pandemic, SBV Governor Nguyen Thi Hong shared that 2022 had been a special year when the world had witnessed unprecedented uncertainties and challenges, with the complicated developments of the COVID-19 pandemic, the Russia-Ukraine conflict, and their consequences such as the disruptions of the global supply chains, the hikes in the prices of commodities and raw materials, high inflation rates around the world. Those risks have been accompanied by the inherent risks such as climate change, geopolitical conflicts, etc., causing the global economy to face a clear recession risk.
SBV Governor Nguyen Thi Hong speaks at the event
In that context, Vietnam's economy has still achieved encouraging results. The macro-economic stability has continued to be maintained; the inflation has been controlled below the target level of 4%. The GDP growth is expected to be at about 8% for the whole year, much higher than the target of 6-6.5% set by the National Assembly.
Together with various efforts of the Government, the SBV has managed the monetary and the exchange rate policies in a flexible manner in line with the actual developments, in close coordination with the fiscal and other macro policies in order to control the inflation and maintain the macro-economic stability. As a result, the inflation and the exchange rates have been kept stable in the context of high global inflation and the sharp depreciation of many regional currencies against the US Dollar. The stability of the macro-economy and the monetary market has contributed to improving Vietnam's national credit ratings, helping Vietnam to be an attractive destination for the international investment flows. In addition, the SBV has strictly controlled credit for potentially risky areas with strong requests for the credit institutions to ensure safe and sound operations. The banking industry has also actively participated in the Government's policies on economic recovery, especially the interest rate support package under the Socio-Economic Development and Recovery Program, the digital transformation of the banking sector, funding for climate change responses, etc.
SBV Governor Nguyen Thi Hong emphasized that the above positive results had been achieved with significant contributions from all of the foreign partners, the international organizations, the embassies, the diplomatic missions, and the foreign credit institutions in Vietnam. The SBV Governor expressed her high appreciation for the contributions of the multilateral financial institutions such as the IMF, the WB, the ADB, etc., which have accompanied the Government and the SBV in responding to the impacts of the COVID-19 pandemic and the unpredictable fluctuations in the global economy through their policy advice, technical and financial assistance, along with many programs, projects, and technical assistance to the SBV and the banking industry to improve the legal and institutional frameworks, promote the policy effectiveness, enhance the financial inclusion, green finance, digital transformation, etc.
The SBV Governor went on to thank the bilateral development partners, such as Global Affairs Canada (GAC), the Swiss State Secretariat for Economic Affairs (SECO), Japan International Cooperation Agency (JICA), the Republic of Korea’s Financial Supervisory Service (FSS), and the German Agency for International Cooperation (GIZ), etc., which have also provided strong and effective support to the SBV and the banking industry, contributing to improving the institutional and operational capacity of the entire banking sector.
The SBV Governor further acknowledged and highly praised the active participation of the foreign credit institutions through the Banking Working Group (BWG), thereby providing their advice to the orientations and policies of the banking sector, contributing to the improvement of the legal and institutional frameworks, the efficiency and effectiveness of the policies, the business and investment environment, and providing resources for the implementation of the national development goals, especially supporting Vietnam to achieve the goal of net zero emissions by 2050 as committed at COP26. Apart from the contributions through the close and effective coordination between the SBV and the partners within the frameworks of bilateral and multilateral cooperation, the BWG has also played an important role in successfully accomplishing the development goals and tasks of the country and the banking industry.
According to the SBV Governor, it is forecast that 2023 would be another challenging year with uneven levels of economic recovery among the countries, high inflation rates, tightened financial conditions, disruptions of the global supply chains and recession risks, even in developed countries. As an economy with large openness, Vietnam is projected to be unlikely to avoid the negative impacts of the world economic developments. In that context, maintaining the macro-economic stability, controlling the inflation, promoting the economic growth, and ensuring the macro balances of the economy continue to be the Government's cross-cutting and consistent goals.
On that basis, Governor Nguyen Thi Hong affirmed that the SBV would continue to manage the monetary policy tools in a cautious, flexible and synchronous manner, in close coordination with the fiscal and other macro-economic policies. The credit growth will also be managed at a reasonable level in line with the macro-economic developments, focusing capital on production and business operations in order to contribute to controlling the inflation, maintaining the macro-economic stability, ensuring the macro balances of the economy, maintaining the stability of the money and the foreign exchange markets, and ensuring a prudent banking system, supporting the economic recovery and growth.
The SBV would also continue to implement strongly the Scheme of Restructuring the system of credit institutions in association with NPL resolution in the 2021-2025 period; strengthening the legal frameworks, the mechanisms and policies on monetary and banking operations, thereby ensuring the safe and sound, healthy and smooth banking operations. The SBV Governor also expressed her hope and beliefs that the international organizations and foreign partners would continue to accompany and support the Government of Vietnam and the SBV to overcome the challenges and achieve new successes.
Mr. Francois Painchaud, Chief Representative of the IMF Office in Vietnam, speaks at the event
At the event, Mr. Francois Painchaud, Resident Representative of the IMF in Vietnam, shared that, thanks to the great efforts of the Government in general and the flexible policies of the SBV in particular, Vietnam's economy has obtained remarkable achievements in 2022, despite the difficulties and challenges inside the country and around the globe. Mr. Francois Painchaud emphasized that, over the past years, the cooperative relationship between the IMF and the SBV has been continuously improved, and the IMF always stands ready to support the SBV and the Government of Vietnam in the future.
Mr. Andrew Jeffries, ADB Country Director in Vietnam, speaks at the event
Speaking on behalf of the ADB, Mr. Andrew Jeffries, ADB Country Director in Vietnam, highly praised the flexible and timely policies of the SBV in the context of difficulties in the global economy. Mr. Andrew Jeffries emphasized that Vietnam is a shareholder of the Asian Development Bank (ADB), and Governor Nguyen Thi Hong is a member of the ADB’s Board of Governors, and the SBV is the official partner of the ADB in Vietnam. On behalf of the ADB, Mr. Jeffries committed to continue to maintain a long-term cooperative relationship with the SBV.
Ms. Michele Wee, Chief Executive Officer of the Standard Chartered Bank Vietnam Ltd., Chairwoman of the BWG, speaks at the event
In her speech, Ms. Michele Wee, Chief Executive Officer of the Standard Chartered Bank Vietnam Ltd., Chairwoman of the BWG, emphasized that the foreign banks can effectively contribute to the sustainable development of Vietnam’s banking industry. On behalf of the BWG, Ms. Michele Wee committed that all foreign credit institutions would continue to cooperate and support the SBV and the Government of Vietnam. Also, she expressed her wishes for furthering the cooperation mechanisms for more knowledge exchanges and best practice sharing with the SBV through seminars, conferences, dialogues, etc., in order to contribute to the development of Vietnam’s banking industry, and the financial and banking services.
Le Hang