The Hanoitimes - In 2017, the State Bank of Vietnam (SBV) has implemented the monetary policy flexibly as part of the effort taking the GDP growth rate to a 10 year high of 6.81%. In 2018, the loan growth is expected to be maintained at 17%.
This target is set by the Vice Governor of SBV Nguyen Thi Hong at the meeting evaluating the performance of implemented monetary policy and banking sector in 2017, and targets for 2018. In 2017, the SBV has flexibly implemented monetary policies to stabilize the financial market, with an aim to control inflation rate and creating conditions for credit institutions to reduce interest rate. As such, with more money is pumped into the national economy, the GDP’s growth rate has reached a 10 year high of 6.81%.
The SBV’s leaders also focused on solutions to reduce interest rate, as an effort to support enterprises and economic growth. Under the pressure of raising credit growth in the first 6 months of 2017, the SBV has put up effort in managing monetary policies to ensure liquidity for credit institutions, maintaining the inter-bank rates flexibly to reduce the market’s lending rate.
SBV set target for credit growth at 17% in 2018.
In particular, as of July 10, in order to facilitate the economic growth in parallel with controlling inflation rate under 4% set by the National Assembly, the SBV has reduce the central rate at 0.25% per year, and 0.5% of the ceiling rate of short term loan at priority sectors.
Following the SBV’s action, credit institutions have reduced lending rate for short term loan of 0.5% per year for priority sectors; reducing interest rate through credit programs supporting enterprises at rate lower than the ceiling set by SBV (lower than the rate of 0.5 – 1% per year); reducing lending rate for mid to long term loan for priority sectors at 8% per year; implementing loan packages for short, mid and long term for essential industries serving the socio-economic development.
With regard to the SBV’s monetary policy management in 2018, the Vice Governor Nguyen Thi Hong will continue maintaining a flexible management mechanism, reducing the interest rate in compatible with the actual conditions of the macro economy. Credit management continue to be the priority of the SBV, as the capital for investment and business is heavily depended on the banks’ credit loan. This year, the target for credit growth is set at 17%.
However, the specific target number will be controlled flexibly, while the agency continues monitoring the actual situation for accurately adjustment. In 2017, with sectors posing high potential risks such as real estate and stock market, SBV has instructed credit institutions to control the process closely. This effort is expected to be extended in 2018.
Notably, Vice Governor of the SBV stated the agency will follow the instruction of the government in removing difficulties for enterprises and pushing forward the administrative reform; actively implementing 6 fields of administrative reform in accordance with Decree No.30/NQ-CP of the government in the overall plan for administrative reform in period 2011 – 2020.