Trang Chủ
Flexible, synchronized policy tools
Sharing at the press conference, SBV First Deputy Governor Dao Minh Tu said that following the instructions of the National Assembly, the Government, and the Prime Minister, the SBV has actively, flexibly and synchronously operated the monetary policy, closely coordinated with fiscal policy, regulating liquidity to stabilize the money market, contributing to controlling inflation in the face of global shocks. By September 16, 2022, the total means of payment increased by 2.72% compared to the end of 2021, increasing 7.2% over the same period in 2021; capital mobilization increased by 4.17% compared to the end of 2021, increasing 8.95% over the same period in 2021.
Based on the 2022 economic growth target of about 6-6.5% and the inflation rate of about 4% set by the National Assembly, the Government and the SBV have oriented credit growth of about 14% in 2022, with appropriate adjustments to actual situations. evolving, credit is managed to actively support economic recovery but not to be subjective to inflation risks. The SBV directs credit institutions to grow credit safely and effectively, directs credit to production and business fields, priority fields according to the Government's policy; strictly control credit in potentially risky areas; create favorable conditions for people and businesses to access bank credit capital. By September 16, 2022, the credit of the whole economy increased by 10.47% compared to the end of 2021 and increased by 17.19% over the same period in 2021.
More information about interest rate management, Deputy Director of the Monetary Policy Department Pham Chi Quang said that the continuous increase of interest rates by the US Federal Reserve (FED) has triggered similar actions in a series of central banks in the world with 257 interest rate increases globally from the beginning of 2022 until now, while in the whole year of 2021, there are only 113 interest rate increases. The Fed's interest rate hike also caused many currencies to depreciate sharply against the US dollar. Accumulating from the end of 2021 to September 20, 2022, Japanese Yen (JPY) went down 25.18%, Won (KRW) went down 17.57%, Yuan (CNY) went down 10.9%, Euro (EUR) went down 13.49%, British Pound (GBP) went down 20.02%...
In the context of a very high increase in global inflation, the pressure on Vietnam to import inflation is very great because of its high open economy and trade deficit from domestic enterprises. The large devaluation of the VND will have a negative impact on imports, affecting the domestic price level. Therefore, according to Mr. Quang, the biggest priority in operating monetary policy is to keep the exchange rate stable, thereby cooling down inflation. But in principle, it is not possible to stabilize interest rates and exchange rates at the same time. Therefore, when the FED raised interest rates at the fastest rate in 40 years, the global exchange rate level was disturbed, forcing a series of central banks to raise interest rates to ensure that their currencies did not depreciate too much.
For Vietnam, according to Mr. Quang, if interest rates are kept too low and stable for too long in the context of the world's current great fluctuations, it will affect the exchange rate, thereby causing other macroeconomic instability. Therefore, the SBV decided to increase by 1% for operating interest rates such as refinancing interest rate, rediscount interest rate, overnight lending rate in interbank electronic payment; and at the same time increase by 0.3% for the ceiling interest rates for demand deposits and deposits with terms of less than 1 month, by 1% for the ceiling of interest rates for deposits with terms from 1 to under 6 months. “The SBV's point of view in policy management is to keep the currency stable, but it does not mean that the currency is fixed. Therefore, the SBV considers that it is necessary to adjust interest rates to neutralize macroeconomic shocks, as well as maintain the people's psychology of inflation expectations and achieve the inflation targets set by the SBV and the Government at the beginning of the year, contributing to macroeconomics stability", Mr. Pham Chi Quang further analyzed.
According to experts, the move of the SBV to increase the operating interest rate by 1% is completely appropriate. Dr. Le Xuan Nghia - Member of the National Monetary and Financial Supervision Advisory Council said that this is a reasonable action for the macro economy in general. “If we do not manage well, it will be very dangerous. When the US increases interest rates, it means forcing the Vietnamese dong to depreciate. The second pressure is that Vietnam's current account deficit during the year is quite large. We also hope that the situation will play out exactly as the central bank predicts,” Dr. Le Xuan Nghia said. Sharing the same opinion, Dr. Truong Van Phuoc - former Acting Chairman of the National Financial Supervision Commission assessed that the increase of the operating interest rate by the SBV by 1 percentage point is an acceptable level and the time is appropriate. This is a necessary remote defense measure in the context of the world having many geopolitical, economic and epidemic uncertainties.
Dr. Vo Tri Thanh - former Deputy director of the Central Institute for Economic Management (CIEM) also said that increasing the operating interest rate of the SBV in the current context is very important. It not only reduces pressure on inflation, but also helps to partly reduce pressure on the exchange rate. An increase of 1 percentage point is not too large, does not have much impact on supporting the production and business recovery process, but increases the possibility that Vietnam can maintain macroeconomic stability.
Stick to the goals
In the context of the world's volatile situation and domestic monetary policy being strongly affected, Deputy Governor Dao Minh Tu affirmed that the SBV has set important targets in the coming time. structured, the first important priority in management is to control inflation, contribute to stabilizing the macro-economy, and ensure the value of the Vietnamese dong.
The second goal is to focus on supporting businesses and people, creating conditions to restore the economy after the epidemic, ensuring economic growth above 6.5% as set out by the National Assembly. At the same time, continue to ensure liquidity, ensure the safety of the system of credit institutions with controlling tools, strengthen inspection and supervision. In addition, the SBV will continue to coordinate with relevant ministries and branches to do well in credit work for national target programs and policy credit programs, especially in implementing programs under Resolution No. 43/2022/QH15 of the National Assembly. In credit management, the SBV has steadfastly oriented credit growth of around 14% in 2022, with adjustments in line with actual developments and situations.
Regarding interest rates, the SBV operates in line with inflation and domestic and foreign markets; continues to direct credit institutions to reduce operating costs and lending interest rates. created, in order to stabilize lending interest rates, the SBV will call on commercial banks to apply modern technology to reduce costs, thereby reducing interest rates and sharing difficulties with businesses. As for the exchange rate, in the third quarter of 2022, the exchange rate and the foreign currency market were under a lot of pressure due to the complicated and unpredictable movements of the international market and the increased risk of recession. In that context, "the SBV continues to manage and ensure exchange rate stability, maintaining a reasonable foreign currency position according to market demand", Deputy Governor Dao Minh Tu affirmed.
