16:38 | 22/05/2016 Economy
(VEN) - Monetary policy stability and inflation curbing require drastic solutions in the international economic integration process. Permanent member of the National Assembly’s Finance and Budget Committee Bui Duc Thu talked with Vietnam Economic News’ Phuong Lan about the monetary policy.
What is your view on the monetary policy during the 2011-2015 period?
The monetary policy during the 2011-2015 period achieved positive results. Inflation was curbed and maintained at a low level, contributing to ensuring macroeconomic stability and better living conditions. The restructuring of commercial banks and credit institutions was implemented following the schedule, while liquidity and credit quality improved. In addition, bad debts declined from 17 percent to 2.55 percent.
What are difficulties for monetary management during the 2016-2020 period?
The economic situation is forecast to be more complex during the 2016-2020 period. The market opening will lead to fiercer competition. If the economy becomes unstable, credit quality will be affected.
Vietnam may also face risks of high inflation during the 2016-2020 period. In addition to positive factors, the consumer price index (CPI) witnessed a fall due to a reduction in global crude oil prices. However in a context where the world’s crude oil prices recover, the CPI will increase. In addition, adjustments in the price of medical services and tuition fees made an increase in the CPI in the first quarter of the year. If water and electricity prices are adjusted to increase in the coming time, while state subsidies decline to call for investment, the CPI will face a strong increase.
How will the monetary policy be implemented in the coming time?
Monetary policy stability and inflation curbing are two main tasks during the 2016-2020 period. In a context where the global economy continues to face unpredictable changes, maintaining good quality of credit, promoting the restructuring of the banking sector, improving competitiveness of credit institutions, curbing inflation and ensuring exchange rate stability will posekey challenges for the government and the State Bank of Vietnam.
I expect that the State Bank of Vietnam would closely follow the real situation, implement the monetary policy in a flexible manner, further improve credit quality and maintain exchange rate stability. It is also necessary to maintain coordination between ministries, departments, agencies as well as support from the business community and people.
The banking sector will continue implementing the monetary policy in an active and flexible manner and in close coordination with the fiscal policy and other macroeconomic policies to control inflation, ensure macroeconomic stability and contribute to economic growth.