Central bank asked to support economic growth

16:49 | 03/01/2020
Prime Minister Nguyen Xuan Phuc on Thursday told the State Bank of Viet Nam (SBV) to take measures to ensure macro-economic stability, inflation control and growth in 2020.
central bank asked to support economic growth
Prime Minister Nguyen Xuan Phuc attended a conference held in Ha Noi on Thursday to set tasks for the banking sector this year.-VNA/VNS Photo Thong Nhat

Addressing a conference held in Ha Noi to set tasks for the banking sector this year, PM Phuc said the SBV must continue setting out its monetary policy in a flexible, cautious and effective manner to support the Governments targets.

Phuc noted the SBV should consider a reasonable credit growth rate for 2020, to ensure the banking sector acts as an important supply channel of capital for the countrys growth.

He directed the banking sector to further cut interest rates to support business and production activities this year.

The Prime Minister said the central bank should better implement projects and resolutions on settling bad debts and restructuring credit institutions that were approved by the National Assembly and the Government with an aim to prevent new bad debts and handle poorly-performing banks.

The Prime Minister also directed the banking sector to enhance the application of technology and achievements of the Fourth Industrial Revolution in all banking operations besides encouraging commercial banks to become digital banks.

At the conference, SBV Governor Le Minh Hung said the SBV would continue to follow a pro-active, flexible and cautious monetary policy as well as working in close conjunction with fiscal and other policies to support the Governments target of controlling inflation at under 4 per cent this year.

The central bank plans credit growth this year to be some 14 per cent, the same as last year. By the end of December, credit growth expanded 13.7 per cent against 2018.

Hung said the central bank would stabilise the monetary market through the use of open market operation (OMO) measures to regulate liquidity among credit institutions.

The central bank would also regulate the interest rate and USD/VND exchange rate policies in line with the Governments targets and market movements. The policies would also aim to stabilise the foreign exchange market and build up national foreign reserves.

According to Hung, with a net purchase of US$20 billion in 2019, the central bank has increased the nations foreign reserves to nearly $80 billion by the end of the year, six times higher than 2011.

The ample foreign currency source would help the SBV more actively regulate the exchange rate and easily take measures to stabilise the forex market if necessary in 2020.

As for bad debt resolution, Hung said the SBV would drastically and effectively implement the Governments approved project on restructuring the system of credit institutions associated with dealing with bad debts in the 2016-20 period, in order to ensure the safety of the banking sector.

Accordingly, the bad debt ratio of the banking system, including those kept at the Viet Nam Asset Management Company, would be kept at below 3 per cent in 2020.

Nguyen Trong Du, deputy chief inspector of the SBVs Banking Inspection and Supervision Agency, reported at the conference that a total of VND305.7 trillion ($13.29 billion) in bad debts was settled between August 15, 2017, and December this year.

It meant that local credit institutions settled bad debts worth VND10.5 trillion per month during the period. The total value of monthly settled bad debts was VND4.9 trillion higher than that in the 2012-17 period.

VNA

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