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First Deputy Governor Dao Minh Tu chairs the Press Conference
Speaking at the Press Conference, First Deputy Governor Dao Minh Tu shared that, in the first 6 months of 2022, apart from a few favorable conditions, the SBV has had to face many difficulties in the management of the monetary policy. The biggest difficulty is the emerging risks of inflation. The financial and monetary situations in many countries have experienced big fluctuations, causing a high pressure on Vietnam’s economy. In that context, the management of the monetary policy in Vietnam has still remained stable. Vietnam’s inflation rate in May 2022 was only 2.25%, with the increase mainly caused by the rising oil prices.
Implementing the directions of the Government and the Prime Minister in Resolution No. 01/NQ-CP dated January 8, 2022, Resolution No. 11/NQ-CP dated January 30, 2022 on the Socio-economic Recovery Program, Resolution No. 43/2022/QH15 dated January 11, 2022 on the fiscal and monetary policies to support the Socio-economic Recovery Program, in the first months of 2022, the SBV has urgently and promptly conducted all of the assigned tasks.
According to the SBV Deputy Governor, in the first 6 months of 2022, the SBV has continued to manage the monetary policy in a proactive and flexible manner, in close coordination with the fiscal policy and other macroeconomic policies in order to control the inflation within the set target, maintaining the stability of the money and the foreign exchange markets, while still standing ready to provide adequate capital resources for the recovery process and the economic growth. The SBV has regulated the open market in an active and flexible manner, ensuring liquidity for the credit institutions, contributing to maintaining the stability of the money market.
Answering the correspondents’ questions about the SBV’s management policies over the exchange rate, the interest rates, the credit, the gold prices and the resolution of non-performing loans (NPLs), the SBV Deputy Governor affirmed that, the SBV would continue to consistently manage the monetary policy in a proactive and flexible manner in order to control the inflation and contribute to maintaining the macroeconomic stability.
The SBV has continued to manage the monetary policy in a proactive and flexible manner, in close coordination with the fiscal policy and other macroeconomic policies in order to control the inflation within the set target, maintaining the stability of the money and the foreign exchange markets, while still standing ready to provide adequate capital resources for the recovery process and the economic growth. Accordingly, the SBV has regulated the open market in an active and flexible manner, ensuring liquidity for the credit institutions, contributing to maintaining the stability of the money market.
About the interest rate management, although there has been pressure from the trend of loosing the monetary policy and increasing the interest rates around the world, the SBV has continued to maintain the key interest rates in order to enable the credit institutions to access capital resources from the SBV with low costs, thereby helping to reduce the lending interest rates for their customers for the recovery of production and business activities.
Overview of the Press Conference
Sharing more information at the Press Conference, Mr. Pham Chi Quang, Deputy Director General in charge of the Monetary Policy Department, said that, after the Federal Reserve System (FED) adjusted interest rates on June 15 with the largest adjustment since 1994, the domestic market has fluctuated slightly, the deposit and lending interest rates have still remained stable. This has been a huge effort in the operations of the SBV. The SBV has strictly followed the policy of managing the exchange rate in a proactive and flexible manner; in close coordination with the domestic and foreign market situations, the macro and currency balances, as well as the monetary policy objectives; thereby, contributing to the recovery of the economic growth and controlling the inflation stably.
Credit growth in line with more positive developments of the economy
About the credit operations, Deputy Governor Dao Minh Tu shared that right at the beginning of 2022, the SBV had directed and oriented the credit flows to focus on production and business activities, the priority fields, controlling credit for potentially risky areas. As of June 9, 2022, the outstanding credit of the whole economy increased by 17.09% in comparison with the same period of 2021, and in accordance with the more positive developments of the economy; thereby, contributing to boosting the economic activities, creating a strong momentum for the recovery of the macro indicators, thus helping to recover and develop the economy.
The SBV has also implemented various robust solutions to support the COVID-19 affected people and businesses, meeting the capital demand for production and business activities through the rescheduling of debt repayment terms, exemption and reduction of banking interest and fees; maintaining the debt classifications; implementing a program on providing loans for the payments of workers’ salaries and job suspension benefits; the solutions on the exemption and reduction of payment service fees, etc.
According to some reports of the banking sector, as of the end of April 2022, the accumulated loan outstanding since the issuance of Circular No. 01/2020/TT-NHNN had reached over VND 695 trillion for a total of over 1.1 million customers. The outstanding balance of the debt categories that have been remained unchanged was estimated at more than VND 198 trillion for nearly 680,000 customers; the accumulated loan outstanding that has benefited from the interest and fee exemption and reduction with the debt categories remained unchanged was VND 91 trillion 490,000 customers. The loan outstanding that has benefited from the interest exemption and reduction with the debt categories remained unchanged was VND 18 trillion for more than 166,000 customers.
As of June 09, 2022, the outstanding credit of the whole economy increased by 8.15% as compared to that of the end of 2021, increased by 17.09% in comparison with the same period of 2021, and in accordance with the more positive developments of the economy. Thereby, contributing to boosting the economic activities, creating a strong momentum for the recovery of the macro indicators, thus helping to recover and develop the economy.
In addition, SBV Deputy Governor Dao Minh Tu said that, the credit growth target in 2022 would be 14% but there would be adjustments depending on the actual needs of the economy. At the same time, the banking sector would continue to implement various robust solutions to support the COVID-19 affected people and businesses, meeting the capital demand for production and business activities through the rescheduling of debt repayment terms, exemption and reduction of banking interest and fees; maintaining the debt classifications in line with Circular No. 01.2020/TT-NHNN dated March 13, 2020 and other Circulars amending and supplementing Circular 01; the loan interest rate reduction policy for customers; implementing a program on providing loans for the payments of workers’ salaries and job suspension benefits; the solutions on the exemption and reduction of payment service fees, etc.
Informing about the resolution of non-performing loans, Mr. Nguyen Van Du, Chief Inspector of the Banking Supervision Agency, shared that, Resolution 42 had created a legal basis for better handling of non-performing loans. According to the results in the centralized reporting system of the SBV, until the end of April 2022, the accumulated value of restructured debts since the issuance of Circular 01/2020/TT-NHNN was more than VND 695 trillion for over 1.1 million customers.
Regarding the foreign exchange management, Mr. Dao Xuan Tuan, Director General of the Foreign Exchange Management Department, provided some information about the gold market management and the foreign exchange reserves of the SBV, which had currently reached over 100 billion USD. With this foreign exchange reserve resources, the SBV has sufficient room to ensure a stable monetary policy.
Implementing Resolution 11/NQ-CP dated January 30, 2022 of the Government, the State Bank has issued the Action Plan of the Banking sector to implement Resolution 11; submitted to the Government for promulgation Decree No. 28/2022/ND-CP dated April 26, 2022 on preferential credit policies for the implementation of the National Target Program for the Socio-economic Development in the Ethnic Minority and Mountainous Areas in the 2021-2030 period; finalized and submitted to the Government for promulgation Decree No. 31/2022/ND-CP dated May 20, 2022 on interest rate support from the state budget applicable to the loans of enterprises, cooperatives and business households. In addition, the SBV has issued Circular 03/2022/TT-NHNN providing guidance for the commercial banks’ implementation of the interest rate support in line with the Government's Decree. On May 27, 2022, the SBV held a virtual Conference on the implementation of the 2% interest rate support program from the State budget worth VND 40 trillion in line with Decree 31/2022/ND-CP of the Government and Circular 03/2022/TT-NHNN of the SBV.
Non-cash payment achieved high growth rate
In payment activities, the legal frameworks and policies have continued to be reviewed and improved, creating favorable conditions for non-cash payment development and digital transformation. The digitalization in the banking sector has continued to be strengthened. In the first four months of 2022, non-cash payment increased by 69.7% in the number of transactions, and by 27.5% in the transaction value; transactions via the internet increased by 48.39% in the number of transactions, and by 32.76% in the transaction value; transactions via smart phones rose by 97.65% and 86.68% in the number and value of transactions respectively; and the transactions via QR code increased by 56.52% and 111.62% in the number and value of transactions respectively, as compared to the figures of the same period of 2021; the total number of activated e-wallets increased by 10.37% as compared to that of the end of 2021.
The communication activities and financial education have been enhanced through many programs which have received high attention from the public, such as “Smart Money”, “Holding the purse-strings" TV shows, contributing to improving the knowledge and skills for the people when using financial services, thereby promoting cashless payment and financial inclusion.
The restructuring of the credit institutions in association with the NPL resolution has continued to be implemented actively. The stability and safety of the system of credit institutions have been maintained. The size of the credit institution system has continued to increase; the financial capabilities, the governance and management quality have all been steadily strengthened in compliance with the international practices.
Actively monitoring and implementing new policies
According to SBV Deputy Governor Dao Minh Tu, implementing Resolution 11/NQ-CP dated January 30, 2022 of the Government, the SBV has issued the Action Plan of the Banking sector to implement Resolution 11; submitted to the Government for promulgation Decree No. 28/2022/ND-CP dated April 26, 2022 on preferential credit policies for the implementation of the National Target Program for the Socio-economic Development in the Ethnic Minority and Mountainous Areas in the 2021-2030 period; finalized and submitted to the Government for promulgation Decree No. 31/2022/ND-CP dated May 20, 2022 on interest rate support from the state budget applicable to the loans of enterprises, cooperatives and business households. In addition, the SBV has issued Circular 03/2022/TT-NHNN providing guidance for the commercial banks’ implementation of the interest rate support in line with the Government's Decree. On May 27, 2022, the SBV held a virtual Conference on the implementation of the 2% interest rate support program from the State budget worth VND 40 trillion in line with Decree 31/2022/ND-CP of the Government, and Circular 03/2022/TT-NHNN of the SBV. Moreover, SBV Deputy Governor Dao Minh Tu also emphasized that the SBV would actively implement the new policies and have specific mechanisms to closely monitor the implementation by the banks.
