Vietnamese Prime Minister Nguyen Tan Dung on December 2 chaired a regular meeting and announced detailed measures to cut production costs and boost investments and exports as well as stimulate domestic demand to avert recession, Vietnamese state media said.
PM Dung turned green light to the State Bank of Vietnam, the country’s central bank, to further cut the benchmark interest rate to 10 per cent effective from Dec 5, the fourth time over past two months, in government efforts to reduce borrowing costs to boost domestic production and consumption.
The SBV will cut refinancing rates and overnight rates to 11 per cent from current 12 per cent, discount rates to 9 per cent from 10 per cent, slash interest rate of compulsory reserves to 9 per cent from 10 per cent, axe by 2 per cent of compulsory reserves of dong and foreign currencies. The central bank also allowed credit institutions and banks to lend cash to effective projects on negotiation bases.
Mr Dung requested the Ministry of Finance to funnel VND17 trillion ($1 billion) from the country’s forex reserve…to boost investments and stimulate the domestic demand as a whole, and disburse VND1.5 trillion ($90.9 million) of government bonds to dredge irrigational systems to serve agricultural production in northern Vietnam.
The government will support sales of steel ingots, construction steel, cement, fertilizer, paper, chemicals…by directing to modify and extend loans, exempt, reduce interest rates, state media said.
The government okayed petrol companies to cut 3.7 per cent to 7.69 per cent of retail prices of petroleum products in order to reduce costs of economic inputs.
The Vietnamese government leader also urged to expand export markets to Africa and the Middle East to compensate for shrinking exports to big economies such as the U.S., EU, Japan…which are falling into recession.
The government prompted the detailed measures after reviewing all the major economic indicators such industrial production value, exports, the two main drivers of the economic growth, which are tend to drop due to the global downturn. (Vietnam Economic Times, Labor, News)
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