On January 7, 2025, in Hanoi, the State Bank of Vietnam (SBV) organized a press conference under the chair of First Deputy Governor Dao Minh Tu to disseminate information on the results of the banking operations in 2024 and the key tasks of the banking sector in 2025.
First Deputy Governor Dao Minh Tu chairs the press conference
Achieved major objectives with appropriate and flexible monetary policy
Delivering his opening speech at the press conference, First Deputy Governor Dao Minh Tu shared that, as compared with the previous year, Vietnam’s economy in 2024 had achieved a lot of positive results thanks to strong directions of the National Assembly and the Government.
Regarding the banking operations, there were more favorable conditions in 2024 than in the previous year, with improved international situations and the monetary policies loosened in many countries, helping to reduce the pressures on the monetary policy in Vietnam.
Overview of the press conference
The gold market sometimes experienced fluctuations, causing certain impacts on Vietnam’s economy, but in general it was still stable within the control range. The commercial banks had actively collaborated with the SBV to promote the credit growth while still ensuring the safety of the system.
According to the SBV Deputy Governor, for the whole 2024 in general, Vietnam had achieved the major objectives with an appropriate and flexible monetary policy, ensuring that the inflation was controlled below 4.5%, while the economic growth reached 7.08%. Those were very positive statistics, and the SBV's monetary policy had played a significant part in those achievements.
Deputy Governor Dao Minh Tu emphasized that, based on the results and the lessons learnt in 2023, following closely the resolutions of the Party, the National Assembly and the Government, as well as the directions of the Prime Minister, the SBV had proactively followed the international and domestic economic developments to implement synchronous solutions to enable businesses and people to access banks’ credit, thereby supporting the recovery of production and business operations.
Regarding the interest rate management, the SBV had continued to maintain the key interest rates to allow the credit institutions to access financial resources from the SBV at low costs, thereby supporting the economy. Besides, the SBV had continued to encourage the credit institutions to cut down on their costs in order to reduce the lending interest rates.
The SBV had also managed the exchange rate in a flexible and effective manner and in association with the monetary policy tools, contributing to absorbing the external shocks. Thanks to that, all legitimate demands for foreign currencies had been fully met; the exchange rate had moved flexibly in both directions of rising/decreasing in accordance with the market conditions. By the end of 2024, the exchange rate had increased by about 5.03%, ensuring smooth export and import activities.
Regarding the management of the gold trading activities, the SBV had conducted synchronous measures in close coordination with the relevant Ministries and agencies. Up to now, the initial goal of narrowing and controlling the gap between the selling price of the SJC-branded gold bullions and the international gold price at an appropriate level has been achieved.
The credit growth for the whole 2024 increased by 15.08%
Regarding the credit management, the Deputy Governor shared that, in order to create favorable conditions for the credit institutions to provide credit resources to the economy, right on December 31, 2023, the SBV had assigned all of the credit growth targets of 2024 to the credit institutions, and had publicly announced the principles for determining the credit targets, so that the credit institutions could proactively implement their credit growth operations.
First Deputy Governor Dao Minh Tu chairs the press conference
In 2024, under the directions of the Government and the Prime Minister on operating the credit growth in a flexible, effective and timely manner, the SBV had proactively adjusted the credit growth targets for the credit institutions twice, first on August 28, 2024, and then on November 28, 2024, based on very clear and specific principles, ensuring the publicity and transparency.
In addition, the SBV had requested the credit institutions to strictly adhere to the directions regarding the monetary and credit operations, as well as the regulations on providing credit, with the goal of improving the banking performance, ensuring the system safety, and maintaining the stability of the money market. The focus was to achieve a safe, effective, and healthy credit growth, while restricting the rise and emergence of bad debts, ensuring the safety in the operations of the credit institutions, and directing credit to the production sectors, the priority areas and the growth-drivers in line with the Government’s and the Prime Minister’s directions; controlling strictly credit for the potentially risky areas; continuing to maintain stable common deposit interest rates, and putting more efforts into reducing the common lending interest rates by cutting down on costs, simplifying the administrative procedures, and accelerating the application of information technology and the digital transformation.
With those synchronous solutions of the SBV, as of 31 December 2024, the credit growth for the whole economy had increased by 15.08% as compared to the end of 2023, focusing mainly on business and production sectors, as well as other priority areas.
Beside that, the SBV had continued to instruct the credit institutions to accelerate the implementation of several credit programs, such as the VND 145,000 billion credit program for social housing, workers’ housing, projects on renovating and reconstructing old apartment buildings; the credit program for the forestry and fisheries sectors. Particularly, the banking sector had swiftly and effectively implemented several measures to support and remove difficulties for the customers affected by Typhoon Yagi.
The legal frameworks, the mechanisms, and the policies for non-cash payment (NCP) and digital banking had continued to be improved and updated to ensure the consistency and create favourable conditions for the development of cashless payments, promoting the digital banking, applying new technologies, and ensuring the security and safety in the payment operations.
The legal system for the monetary and banking operations had continued to be improved, ensuring safe operations of the banking system, while still keeping pace with the practical requirements and the international trends and standards. The SBV has been working on the draft legal documents to provide detailed guidance for the implementation of the 2024 Law on Credit Institutions, ensuring full alignment with the provisions of the law.
The stability and safety of the credit institutions’ system had continued to be maintained steadfastly, and the legitimate rights of depositors had been guaranteed. Non-performing loans (NPLs) had had continued to be controlled and resolved in the context of numerous difficulties facing the economy, affecting the debt service of many businesses.
In addition, the banking sector had also strengthened the financial education and communication efforts to raise the public knowledge and skills in accessing and using banking services in the digital environment. This had contributed to the continued positive results of cashless payments and the digital transformation in the banking sector.
Managing the monetary policy tools and solutions in a flexible and synchronous manner
At the press conference, Deputy Governor Dao Minh Tu and the representatives of several Departments under the SBV answered the reporters’ questions regarding the management of the monetary policy and the banking operations in the coming time.
Regarding the future directions for the SBV’s management, Deputy Governor Dao Minh Tu affirmed that the SBV would continue to follow closely the market developments, the domestic and international economic situations in order to manage the monetary policy tools and solutions in a flexible and synchronous manner, aiming to control the inflation, maintain the stability of the macroeconomy, and ensure the stability in the money and the foreign exchange markets, while still regulating the credit growth in accordance with the established targets, focusing specifically on:
Firstly, managing the interest rates in line with the market developments, the macroeconomic conditions, the inflation situation, and the monetary policy objectives.
Secondly, following closely the market situations to regulate the exchange rate in a flexible and appropriate manner, in synchronous coordination with other monetary policy tools to help control the inflation and maintain the stability of the macroeconomy.
Thirdly, implementing appropriate credit management solutions in line with the macroeconomic developments and the inflation situation, ensuring to meet the credit demands of the economy. The SBV would assign the credit growth targets for 2025 for the commercial banks right from the beginning of the year, and would publicly announce the principles for determining the credit targets so that the commercial banks could proactively implement their credit growth, ensuring the safety and effectiveness, focusing on production and business sectors, and the priority areas, in line with the Government’s policy, while still controlling strictly credit for the potentially risky areas; creating favourable conditions for the people and businesses to access banks’ credit; continuing with the implementation of the targeted credit programs for certain sectors in accordance with the directions of the Government and the Prime Minister.
Fourthly, implementing strongly and effectively the Scheme on “Restructuring the credit institutions’ system in association with resolving bad debts for the 2021-2025 period”, helping to develop a healthy, high-quality, efficient, transparent and law-abiding banking system, meeting the international standards; accelerating the resolution of bad debts, while improving the credit quality and minimising the emergence of new NPLs.
Fifthly, focusing on the implementation of Decree No. 52/2024/ND-CP on non-cash payments (Decree 52), as well as other Circulars providing detailed guidance for the implementation of Decree 52 and the 2024 Law on Credit Institutions; continuing to effectively implement the Implementation Plan for the Scheme on non-cash payment for the 2021-2025 period, and the Digital transformation plan of the banking sector; enhancing the security, safety and confidentiality in the payment and banking operations.
The SBV would also direct the payment service providers to enhance the security and safety of online payments and banking card transactions to protect the customers’ rights. Additionally, there would be increased efforts to strengthen the financial education and communication to improve the public knowledge and skills in using the financial and banking products and services.
HY-HP