The State Bank of Vietnam's headquarters (Photo: VNA) Hanoi (VNS/VNA) - The State Bank of Vietnam (SBV) announced it could adjustmonetary policies, including credit growth and incentives, in the remainingmonths of the year to cope with the COVID-19 pandemic.
Undera recent directive, SBV Governor Le Minh Hung said the COVID-19 outbreak wouldcontinue to be unpredictable, which could push the global economyinto a deeper recession and have a heavy impact on the Vietnamese economydue to its deep economic integration.
Underthe difficulties, Hung requested the banking industry follow domestic andforeign economic developments to forecast and propose effective solutions inorder to ensure market liquidity, control inflation and further cut interestrates.
Banksneed to target lending for production and business, especially sectors andfields prioritised by the Government, such as agriculture businesses, firmsproducing goods for export, small- and medium-sized enterprises, start-ups,enterprises operating in auxiliary industries and hi-tech enterprises, whilecontinuing to strictly control credit for potentially risky sectors such asreal estate, securities, as well as Build-Operate-Transfer (BOT) andBuild-Transfer (BT) projects in transport.
Healso asked the SBV’s Credit Department to consider adjusting 2020 credit growthtargets for banks that have met the SBV’s requirements.
TheSBV allocated the credit growth limit for all credit institutions at 10.1 percent,lower than the 13 percent set earlier in the year due to the impact of theCOVID-19 pandemic. However, some commercial banks have also asked the centralbanks to expand their credit growth.
Accordingto experts, though banks’ income from services has improved in recent years,70-90 percent of banks’ profits still come from credit activities, so it isunderstandable that banks expected the SBV to extend the credit threshold.
Expertsagreed with the banks’ proposal to extend credit growth. Banking expert NguyenTri Hieu said he supported the proposal as it would help maintain economicgrowth, especially in times when many economies, including Vietnam, were atrisk of slowing down.
Underthe directive, the Governor required bank authorities to coordinate withrelevant ministries and agencies in implementing procedures to use Statecapital to increase charter capital for State-owned Agribank.
Theauthorities would also consider procedures to increase charter capital forother State-owned banks, including VietinBank and Vietcombank, through thepayment of dividends in shares.
Hungsaid the central bank would closely monitor developments of the foreigncurrency market to proactively manage the exchange rate flexibly andappropriately.
TheSBV would intervene in the exchange rate when necessary to stabilise theforeign exchange market, contributing to the country’s macroeconomicstability, Hung noted.
Itwould also closely follow the fluctuations of global and domestic gold prices,not to have it affect macroeconomic stability./.
Undera recent directive, SBV Governor Le Minh Hung said the COVID-19 outbreak wouldcontinue to be unpredictable, which could push the global economyinto a deeper recession and have a heavy impact on the Vietnamese economydue to its deep economic integration.
Underthe difficulties, Hung requested the banking industry follow domestic andforeign economic developments to forecast and propose effective solutions inorder to ensure market liquidity, control inflation and further cut interestrates.
Banksneed to target lending for production and business, especially sectors andfields prioritised by the Government, such as agriculture businesses, firmsproducing goods for export, small- and medium-sized enterprises, start-ups,enterprises operating in auxiliary industries and hi-tech enterprises, whilecontinuing to strictly control credit for potentially risky sectors such asreal estate, securities, as well as Build-Operate-Transfer (BOT) andBuild-Transfer (BT) projects in transport.
Healso asked the SBV’s Credit Department to consider adjusting 2020 credit growthtargets for banks that have met the SBV’s requirements.
TheSBV allocated the credit growth limit for all credit institutions at 10.1 percent,lower than the 13 percent set earlier in the year due to the impact of theCOVID-19 pandemic. However, some commercial banks have also asked the centralbanks to expand their credit growth.
Accordingto experts, though banks’ income from services has improved in recent years,70-90 percent of banks’ profits still come from credit activities, so it isunderstandable that banks expected the SBV to extend the credit threshold.
Expertsagreed with the banks’ proposal to extend credit growth. Banking expert NguyenTri Hieu said he supported the proposal as it would help maintain economicgrowth, especially in times when many economies, including Vietnam, were atrisk of slowing down.
Underthe directive, the Governor required bank authorities to coordinate withrelevant ministries and agencies in implementing procedures to use Statecapital to increase charter capital for State-owned Agribank.
Theauthorities would also consider procedures to increase charter capital forother State-owned banks, including VietinBank and Vietcombank, through thepayment of dividends in shares.
Hungsaid the central bank would closely monitor developments of the foreigncurrency market to proactively manage the exchange rate flexibly andappropriately.
TheSBV would intervene in the exchange rate when necessary to stabilise theforeign exchange market, contributing to the country’s macroeconomicstability, Hung noted.
Itwould also closely follow the fluctuations of global and domestic gold prices,not to have it affect macroeconomic stability./.
VNA
