SBV Puts Forth Monetary Measures to Macroeconomic Stability

On March 1, 2011, the State Bank of Vietnam (SBV) issued the Directive No. 01/CT-NHNN on the implementation of monetary and banking measures in an attempt to control inflation, stabilise macro economy, and ensure social security.

 

Accordingly, the central bank underscored the 2010 targets: implementing tight and prudent monetary policy, controlling growth of credit at 20 percent or lower and the growth of payment means at 15 - 16 percent, and bringing interest rates and exchange rates to reasonable levels.

 

Credit institutions must formulate and implement reasonable business plans in 2011 in line with the targets of credit growth and credit quality improvement. Commercial banks are required to reduce non-production loans in their lending structures to at most 22 percent by June 30 and 16 percent by December 31, 2011. In case, they fail to satisfy these ratios as scheduled, they will be obliged to double compulsory reserve ratio from the general ratio applied to healthy credit institutions and subjected to operating restrictions if they fail to meet requirements in the last six months and in 2012. As of June 30, 2011, the central bank will impose reasonable and necessary measures to deal with credit institutions that fail to reach the target of credit control.

 

In addition, they must determine VND/USD exchange rates in accordance with the Decision 230/QD-NHNN dated February 11, 2011 of the Governor of the State Bank.