Managing monetary policy smoothly, consistently and effectively

At the meeting, Deputy Governor Pham Thanh Ha reported that in the first seven months of 2024, the SBV had implemented synchronized solutions in order to create favorable conditions for businesses and individuals to access credit resources, enhance the capital absorbability, and ensure the safety of the credit institution system.

The SBV had also managed monetary policy harmoniously to maintain stability in the money and forex markets. Various tools had been employed to reduce short-term pressures on the exchange rate, contributing to stability in the foreign currency market, inflation curbing, and support for economic growth.

Regarding interest rates, the SBV had continued to maintain key interest rates, allowing credit institutions to access the SBV’s capital resources at a low cost, and encouraged credit institutions to reduce their costs, resulting in significant decreases in average lending interest rates. By the end of June 2024, average deposit and lending interest rates stood at 8.3% and 3.59% p.a., respectively. These figures represent reductions of 0.96 and 1.08 percentage points compared to the end of 2023.

Regarding credit, as of the end of July 2024, the total outstanding credit had increased by 14.99% compared to the same period in 2023, and up by 5.66% compared to the end of 2023. The overall credit growth had maintained a recovery trend since the end of March.

During the meeting, First Deputy Governor Dao Minh Tu reported that the SBV had been coordinating with relevant Ministries and agencies to implement several credit programs, including a VND 120,000 billion credit program for lending to social housing, workers’ housing, and projects to renovating or reconstructing old apartment buildings; an expanded credit package for the forestry and fisheries sectors, increasing from VND 15,000 billion to VND 30,000 billion. By the end of June 2024, the commercial banks had accumulated a total disbursement of over VND 35,400 billion for about 9,900 turns of borrowers, achieving the total of committed loan amount in the program.

SBV Governor Nguyen Thi Hong also asserted that, over the past time, the SBV had proactively maintained the key interest rates even when there were significant increases of the interest rates around the world, with view to creating favorable conditions for the domestic business and production operations. According to the SBV Governor, in the management of the monetary policy and the banking operations, it is very difficult to ensure synchronization between the exchange rate and the interest rates, because of all fluctuations and unexpected developments. However, the SBV is still determined to manage the monetary policy to fully accomplish all of the assigned tasks in the coming time.

In his concluding remarks, Prime Minister Pham Minh Chinh assessed that the SBV has strictly and effectively implemented the Government’s directions and guidance on “managing the monetary policy in a proactive and flexible manner” in the context of many difficulties and challenges, in close coordination with other policies, from the fiscal policies to the trade, investment and real estate development policies, etc., contributing to the realization of the objectives of maintaining the macro-economic stability, controlling the inflation, boosting the economic growth in all of the three regions, and ensuring the macro balances.

The Prime Minister complimented the efforts of the SBV and the entire banking sector in managing the monetary policy, contributing to the socio-economic development.

The Prime Minister requested the SBV to continue managing the monetary policy in a proactive and flexible manner, in close coordination with other policies; managing the exchange rate flexibly through various tools; managing the total credit growth at about 15%, focusing on the traditional and new growth drivers, in line with the macro-economic situations and the inflation, meeting the capital demand of the economy; enhancing the management of the gold and the forex markets in a professional manner; accelerating the NPL resolution, strictly implementing the Scheme of Restructuring the credit institutions’ system in association with the NPL resolution for the 2021-2025 period; promoting the digital transformation in the banking sector; continuing to enhance the communication and information; strengthening the banking supervision and inspection; improving the transparency, etc.