Forecasting cash demand in Vietnam’s economy

The seminar was attended by professors and researchers from a number of Korea's top universities; representatives and researchers from the BOK, and several relevant entities of the SBV.

In her opening speech, Mrs. Hoang Thi Phuong Hanh, Deputy Director General of the International Cooperation Department under the SBV, expressed high recognition of the BOK - KPP between the SBV and the BOK, which is regarded as one of the most effective and practical technical assistance programs in Vietnam’s banking sector, and the Program’s results have been positively received within the framework of cooperation between the two central banks. Mrs. Hoang Thi Phuong Hanh expressed her beliefs that this year’s Program would continue to be successful, contributing to the development of the bilateral cooperation relationship between Vietnam and the ROK in the field of banking.

Mrs. Hoang Thi Phuong Hanh, Deputy Director General of the International Cooperation Department under the SBV, speaks at the Workshop.

Every year, the SBV uses the forecasts of cash demand as an important basis for its decisions on the quantities and the face values of money to be printed. In order to improve the quality of the economy's cash demand forecasts and fully assess the impacts of all relevant factors, the SBV had requested the BOK to share the BOK’s knowledge and experience about the models and the methods of cash demand forecasts being applied in Korea.

Expressing her high expectations for the Program's research results, Mrs. Nguyen Thi Thu Huong, Deputy Director General of the Issue and Vault Department, Head of the Vietnamese Research Team, hoped that the BOK’s practical experience, together with the contributions by various professors and researchers from the top universities in Korea, would help to develop an appropriate model for the cash demand forecast in Vietnam, with specific implementation steps to realize it. This would be a valuable source of support and reference, contributing to improving the current research as well as Vietnam's policy framework related to cash management.

Representatives from the SBV and the BOK exchange the Minutes of Discussion on the implementation of the BOK - KPP in 2023.

Sharing at the Workshop, Mr. Kim Young Han, Professor at Sungkyunkwan University, Head of the Korean Research Team, spoke highly of the enthusiastic and proactive working process of both sides. He also expressed his beliefs that the Workshop would be successful, bringing positive results for this year’s BOK - KPP.

The participants also exchanged and shared other contents, including an overview of the BOK - KPP; the cash demand in Vietnam over the past years; the current models and methods for the cash demand forecasts in Vietnam; the characteristic of the models and methods for the cash demand forecasts of the BOK; the orientations to improve the models and methods for the cash demand forecasts in Vietnam; the macroeconomic impacts of the changes in the cash demand and the implications on the cash issuance policies; etc.

Through the Launching Workshop, the research team of the SBV and the professors, researchers from the ROK had a chance to further coordinate, dig deep into the potential problems, aiming towards developing and finalizing the consultants’ report of the 2023 BOK - KPP.

Also at the Workshop, the leaders of the International Cooperation Department under the SBV and the BOK signed and exchanged the Minutes of Discussion on the implementation of the BOK - KPP in 2023, which contains important substances, such as the foundation, the objectives and the details of the cooperative activities, as well as the outcomes of the Program.

LK