"As of February 20, 2014, total means of payment increased by 1.94 percent compared with the end of 2013; the mobilised capital increased by 0.83 percent compared with that of the end of 2013, the liquidity of the credit system was guaranteed; interbank market interest rates have stabilised at a low level ," said Ms Nguyen Thi Hong, Head of the Monetary Policy Department - the State Bank of Vietnam (SBV) in a regular press conference in February, 2014.
According to Ms Hong, in order to perform guidelines of the National Assembly and the Government in socio-economic development plan in 2014, the Governor of SBV issued Directive 01/CT-NHNN dated January 15th, 2014 on implementing monetary policies and effectively ensuring banking operations in 2014. Thus, during 2014, SBV will run the monetary and fiscal policy actively and flexibly to control inflation, stabilise the economy, stimulate economic growth at a reasonable level and ensure the liquidity of the credit institutions as well as the economy. Particularly, the total means of payment increased by 16-18 percent, credit 12-14 percent.
In the first 2 months of 2014, SBV continued to operate the tools of monetary policy to support liquidity for credit institutions and meet the payment demand promptly, before Tet (Lunar New Year), through open market operations and money withdrawing after Tet through selling bills to stabilise currency markets.
The central bank also remains operating interest rates, maximum short -term lending rates in Vietnamese Dong of credit institutions for priority areas, maximum deposit rates in Dong and US dollar. SBV requires credit institutions to reduce 13 percent per year of lending rates (including the old loans) and 1 percent per year of interest rates of state-owned commercial banks applied in 2014 for the outstanding account of housing-support loans.
Exceptionally, in the first two months of 2014, deposit and loan interest rates continued to be stable before the Lunar New Year. After Tet, the short-term deposit rate in Vietnamese dong (1-2 months ) dropped 0.2-0.5 percent per year due to deposits returned to the banking system, while lending rates kept stable compared with the ground before the Lunar New Year.
On the basis of credit growth target over the whole credit institutions in 2014, credit operations and the credit growth capacity of the banking system, the central bank allocated credit growth targets for the banks, simultaneously, required banks to plan and promote credit growth throughout 2014 under the credit growth target given by SBV. According to the statistics, as of February 20th, 2014, the credit growth over the whole banking system fell 1.66 percent in comparison with the end of 2013. It exactly reflected the law of credit in recent years as credit growth often reduces or increases inconsiderably in the early months (the first two months of 2012 decreased by 1.88 percent; 2013, 0.23 percent ); of which Vietnamese dong credit fell 1.94 percent and foreign exchange credit rose 0.11 percent.
Plus, SBV regulates the exchange rate between Vietnamese dong and foreign currencies in accordance with supply and demand of foreign currencies and macro-economic developments in order to stabilise the foreign exchange market and exchange rates. The interbank interest rate also experiences the same situation. Foreign exchange market during the first 2 months remains unchanged and the central bank boosts foreign reserves. Until February 26, 2014, the exchange rates of Vietnamese dong against US dollar at commercial banks reached 21,080/21,120.
In the following months of 2014, the central bank will continue to manage the monetary and fiscal policy effectively to control inflation, stabilise macro-economy, support economic growth at a reasonable level and ensure the liquidity of the banking system and the economy; flexibly operate open market operations, interest rates and exchange rates in accordance with macro-economic and monetary developments, especially inflation.
Anh Ngoc
Vietnamese
