2015 monetary policy: Improving position of Vietnamese dong

14:52 | 11/01/2016 Economy

(VEN) - State Bank of Vietnam (SBV) Deputy Governor Nguyen Thi Hong talked about how to improve the position of the Vietnamese dong in an interview with Vietnam Economic News’ Duy Minh.

2015 monetary policy: Improving position of Vietnamese dong

SBV Deputy Governor Nguyen Thi Hong

What did the banking sector do to complete the 2015 credit growth target?

The SBV set out the credit growth target of 13-15 percent in 2015. Total means of payments increased by 13.55 percent by December 21, 2015 compared to the same period in 2014, while capital raise increased by 13.59 percent. Credit growth could reach an estimated 18 percent in 2015. Capital flows continued to be reasonably allocated, focusing on trading and production activities, especially in the government’s priority sectors, contributing to bringing practical effectiveness for the economy.

The SBV implemented a flexible adjustment of monetary policy, contributing to improving the position of the Vietnamese dong in 2015.

The SBV has also deployed solutions in order to promote monetary management, credit growth and banking activities since the beginning of 2015 and has created favorable conditions for enterprises, cooperatives and households in accessing capital, contributing to enhancing credit quality and ensuring capital supply to the economy.

What specific measures did the SBV implement to stabilize exchange rate, prevent the dollarization of the economy and maintain the government’s macroeconomic policy?

Exchange rates and the foreign exchange market continued to be stable and were seen as one of Vietnam’s highlights during the 2011-2015 period, helping enhance Vietnam’s credit rating in the world. Interest rates on the US dollar were flexibly adjusted from 5.2 percent in 2011 to zero percent in 2015. Confidence in the national currency was enhanced, while the dollarization of the economy continued to fall. In addition, the demand for US dollars by businesses was met.

Positive results of the foreign exchange market in 2015 reflected active operations of monetary policy. The interbank average exchange rate was adjusted to increase by three percent, while the trading band between the Vietnamese dong and US dollar was widened from +/- 1 percent to +/- 3 percent in order to respond to negative impacts of the international financial markets. The SBV also issued regulations to prevent foreign currency speculation. And these great efforts of the SBV were highly appreciated by the government and international organizations.

The SBV is improving the system in order to ensure more flexible operations in the coming time.


What measures will the SBV deploy to promote credit growth and complete the economic development targets passed by the National Assembly?

The SBV has devised key solutions in terms of monetary policy operations in 2016 such as actively and flexibly implementing monetary policy in close cooperation with fiscal policy and other macroeconomic policies in order to control inflation under five percent, ensuring macroeconomic stability, promoting economic growth at a reasonable level, managing interest rate and exchange rate in accordance with macroeconomic developments and the domestic and international monetary market, improving credit quality, actively deploying solutions to manage the foreign exchange market and the gold market and preventing the dollarization of the economy.

The SBV will set out the credit growth target of 18-20 percent in 2016 focusing on trading and production activities and priority sectors. Investments pouring into real estate and securities will be strictly controlled. The SBV will also cooperate with relevant ministries and agencies, and localities to drive capital flows towards more useful sectors.

Interest rate continued to fall by 0.2-0.5 percent a year in 2015, contributing to ensuring stability of the monetary and foreign exchange market. In addition, lending interest rates for some credit programs fell to 6.5-6.6 percent a year.


Duy Minh



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