On February 15-16, 2024, in Mumbai (India), the SEACEN Governors’ Conference/High-Level Seminar and the 43rd SEACEN Board of Governors (BOG) Meeting were held with the attendance of Governors and representatives of all SEACEN member central banks.
SBV Governor delivers her discussion paper at the High-Level Seminar themed "Navigating Economic Headwinds and Advancing Financial Inclusion: Perspectives and Challenges"
On February 15, the Seminar themed "Navigating Economic Headwinds and Advancing Financial Inclusion: Perspectives and Challenges" took place with three discussion sessions, focusing on such matters as drivers for achieving the inflation targets; challenges and implications of the high interest rates; the role of the digital public infrastructure in financial inclusion.
Attending the second panel discussion session on "Challenges and Implications of Higher for Longer Interest Rates", Governor Nguyen Thi Hong of the State Bank of Vietnam (SBV) shared about the experience in managing the monetary policy and controlling the inflation in Vietnam in 2023, as well as analyzed the hiking interest rate matter in the domestic and the global contexts, thereby suggesting a number of common measures.
The SBV Governor shared that Vietnam’s economy is highly open, with the intensive participation in the economic integration and the global supply chains. Therefore, it is easy to be affected by the fluctuations in the international market, especially the impacts from the tightening of the monetary policies by the central banks around the world. In that context, the SBV has managed the monetary policy instruments in a consistent and flexible manner in close coordination with the fiscal policy towards the objectives of controlling the inflation, contributing to maintaining the macro-economic stability, supporting the economic growth at an appropriate level, while still ensuring a prudent banking system, thereby maintaining the confidence of the investors, the business community and the people in the business environment. For the interest rate management, the SBV has regulated the interest rates in a flexible manner, creating a sufficient policy room to increase the absorbability against external shocks. For the exchange rate management, the SBV has been consistent with the management of the monetary policy and the exchange rates in the direction of creating the attractiveness of the VND, and persistent in controlling the inflation to maintain the confidence in the domestic currency. The exchange rate has been allowed to develop flexibly in line with the market situations to absorb the shocks.
These management results of the SBV had contributed to controlling the inflation at 3.25% and supporting the economic growth rate at 5.05% in 2023. Moreover, 2023 also marked the highest FDI flow into Vietnam over the past five years, affirming the confidence of the foreign investors in Vietnam’s potentials and macro-economic stability.
Besides, from the perspectives of the regulator in the banking sector, the SBV Governor said that in 2024, the central banks around the world would face complex policy choices. This situation poses a common requirement for them to maintain prudent policies in the coming time. Along with that, it is necessary to ensure macro safety indicators and implement the banking inspection and supervision safely and effectively. In the process of implementing these tasks, the SBV Governor emphasized that it is essential to regularly maintain the channels of dialogue and the policy exchanges among the central banks and the regional and global financial and monetary organizations, contributing to limiting the spreading risks, and joining hands to overcome the difficulties and challenges.
Speaking at the Seminar, the panelists made high evaluation for the SBV Governor’s discussion points, and agreed that in the context of the difficulties in the world economy and the inflation pressures, Vietnam is considered as a bright spot in the regional economic picture. The SBV had managed the monetary and the exchange rate policies in an appropriately and effective manner, making an important contribution to maintaining the stability of the macro-economy and the financial sector.
On February 16, 2024, at the 43rd SEACEN BOG Meeting, the Governors of the member central banks discussed the orientations for SEACEN's operations in the coming time, including the enhancement of the research and training programs, the knowledge sharing to meet the needs and the practical situations of the members, and the regular expansion of the professional cooperation with reputable international experts and organizations. The Governors agreed that these efforts would enable SEACEN to become a prestigious training and research center in the region. In addition, within the framework of the Meeting, the Governors of SEACEN member central banks also adopted SEACEN's training and research plans, and the expected budget for 2024.
Le Hang