On April 3, in her speech at the Government’s monthly press conference of March 2023, Governor Nguyen Thi Hong of the State Bank of Vietnam (SBV) said that in order to resolve the difficulties of the economy, it is necessary to conduct systemic measures based on the principle of resolving any arising obstacles while still keeping a cautious eye on emerging risks.
SBV Governor Nguyen Thi Hong speaks at the Conference
Governor Nguyen Thi Hong shared that the global financial uncertainties have not yet affected Vietnam’s finance and banking sector. However, it is necessary to monitor closely the global developments because any fluctuation in the global economy would lead to the capital transfers among the economies, the SBV Governor emphasized.
About the domestic economy, Governor Nguyen Thi Hong shared that the difficulties in Vietnam are also the common ones faced by other economies. However, the positive side is that in Vietnam the inflation has been controlled at a low level of 4.18%. This is a favorable condition for the businesses and the people.
In addition, Vietnam’s banking sector has remained its stability despite the uncertainties in the international financial markets and the collapse of several banks around the world. In the first Quarter of 2023, the SMBC’s acquisition of 15% stake in VPBank for VND 36 trillion reflected the investors’ trust in Vietnam’s investment environment.
About the GDP growth, which made only 3.32% in the first Quarter of 2023, the SBV Governor said that the main reason was a decrease of the demand for export, while the FDI faced a declining trend with a decrease of 2.2% in the actual disbursement, etc. Regarding the inflation, the CPI in March 2023 decreased by 0.23% against that of February 2023; the average core inflation in the first Quarter of 2023 was up by 5.01% as compared with that of the same period of 2022.
About the management of the monetary policy and the banking operation, in the above-mentioned context, like other central banks around the world, the SBV has been facing many challenges and pressures from the dual tasks of conducting measures to resolve the difficulties for the economy while ensuring the stability of the banking sector, the money and the forex markets…
The SBV Governor shared that in the first Quarter of 2023, the SBV had purchased USD 4 billion, helping to increase the liquidity of the banking sector. After the Tet holidays, the deposit amounts at the banking sector have increased significantly.
About the credit operations, by end of the first Quarter of 2023, the credit growth rate was up by 2.06%, which is lower than that of the same previous periods, excluding that of last year. By now, the SBV has been conducting a number of measures to support the credit growth, i.e. through the measure of monetary regulation as well as the assessments for recommendations about the debt rescheduling and debt group categorization.
About the interest rates, since the beginning of 2023, the SBV has conducted various measures and the common interest rates are now on a downward trend. At the end of the previous week, the SBV cut down the key interest rates by 0.5-1% p.a. on the basis of a negative inflation rate, a small adjustment of the Fed’s roadmap for increasing the key interest rate, and the stable VND/USD exchange rate.
Sharing about the orientations in the coming time, the SBV Governor said that the SBV has been coordinating with the relevant Ministries and agencies to revise Circular No. 16/2021/TT-NHNN stipulating the trading of corporate bonds by the credit institutions and the foreign bank branches in order to resolve the difficulties while still ensuring a prudent banking sector.
About the interest rate support program, Governor Nguyen Thi Hong shared that the SBV has been working with the relevant Ministries and agencies and have agreed not to revise Decree 31 because the beneficiaries are already stipulated in the related Resolutions of the National Assembly.
In giving some recommendations, Governor Nguyen Thi Hong said that in order to resolve the difficulties for the economy, it is necessary to conduct systemic measures based on the principle of resolving any arising obstacles while still keeping a cautious eye on any emerging risks.
About the real estate and the corporate bond markets, the SBV Governor shared that in the discussion with the International Monetary Fund (IMF), the IMF had made some recommendations which the relevant Ministries and agencies may consider. Specifically, when assessing real estate projects or enterprises, it is recommended to have the participation of a third party, similar to financial auditing, in order to provide prompt support for those projects with temporary difficulties. The IMF had also given a view that when implementing support measures, it is necessary to prevent risks to the asset balance sheets of the credit institutions, and control the maturity-related risks because the corporate bond and the real estate markets normally involve long maturities and large amounts of money.
Le Hang