PM tells Vietnam central bank to target inflation
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Vietnam Prime Minister Nguyen Tan Dung has asked the banking sector to continue performing its management functions effectively, particularly in better applying monetary policy as it works to meet the target of curbing inflation at a lower rate than 2012.
Dung updated a conference yesterday on the tasks facing the banking sector this year. He said the targets are increasing macro-economic stability, keeping the inflation rate low while promoting higher economic growth and ensuring social security and welfare.
The PM instructed the State Bank of Vietnam to continue managing interest rate and credits as well as creating conditions to support businesses receive loans.
The bank should prioritise capital for sectors such as agriculture and small and medium-sized enterprises while coordinating with relevant ministries and agencies to help the production and business sectors, he said.
The bank was asked to tighten management over the exchange rate and the foreign exchange market and to ensure the value of the Vietnamese dong remains stable, while effectively administering the gold market so that it contributes sufficiently to stabilising the macro-economy.
Dung also requested the central bank to continue handling bad debts in the banking system, increase inspections and supervision of enterprises and finalise institutions to well undertake banking operations. He said these measures would create a legal basis for credit organisations to operate.
Appraising contributions made by the banking sector to the national development, the PM said the sector had played a crucial role in the country’s general achievements in 2012, particularly in state management, restructuring commercial banks, managing the gold market and tackling the challenges facing the economy.
In 2012, the sector managed to help increase foreign exchange reserves for the state while curbing inflation and guaranteeing the safety of the banking system.
By the end of 2012, the deposit interest rates in Vietnamese dong dropped by 3-6 per cent per year while the interest rates for loans dropped by 5-9 per cent per year in comparison with 2011.
The credit growth stood at 8.91 per cent by the end of last year.
At the conference, the banking sector confirmed that its targets were in line with Dung’s requests.
