On the afternoon of May 29, speaking to explain and clarify the opinions of National Assembly deputies at the discussion session on the socio-economic situation and the State budget, Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong said that these are issues that the Government and the Prime Minister have resolutely directed to resolve.
According to Ms. Hong, in the context of general difficulties, countries will have to sacrifice growth when controlling inflation, but Vietnam has achieved both inflation control and recorded growth - although not as the target set by the National Assembly, compared to countries in the region and the world, this is a fairly high growth rate.
"This is a bright spot highly appreciated internationally," the Governor of the State Bank emphasized.
In the first 5 months of 2024, Vietnam's macro-economy and currency continued to be stable. However, there are still developments that the Government is closely monitoring and directing.
Firstly, the exchange rate is under increasing pressure. This is a common trend in countries around the world and the region, many currencies in the region are also depreciating at a relatively high rate.
The State Bank of Vietnam assessed that in a volatile economic environment, "exchange rates sometimes increase and sometimes decrease is completely normal". Implementing the Government's direction to stabilize exchange rates and the foreign exchange market, the State Bank of Vietnam has closely monitored and synchronously implemented policy solutions to regulate currency and intervene to ensure foreign currency sources for import enterprises to serve domestic production.
The Governor of the State Bank of Vietnam said that in the coming time, the re-development of domestic production and export will contribute to supporting the supply and demand of foreign currency. In particular, when there are fluctuations in the USD exchange rate, businesses will also increase their future purchases and pre-purchase of USD, thus reducing the demand for foreign currency in the future.
"It is expected that the US Federal Reserve (FED) will adjust interest rates down by the end of 2024. Many forecasts also predict that the USD exchange rate will cool down by the end of the year. The State Bank of Vietnam continues to closely monitor market developments to reassure businesses," said Ms. Hong.
Regarding the issue of low credit, which has been mentioned in many previous meetings, according to the SBV leader, this is not only a trend in Vietnam but also a common trend in the world when countries implement tight monetary policies. In recent times, under the direction of the Government, the SBV has also implemented many solutions to support and promote credit growth.
According to the Governor of the State Bank of Vietnam, there are many reasons for low credit growth, among which, many National Assembly deputies pointed out that the reason is that export output, domestic consumption output or sectors with large loans such as the real estate market are currently facing difficulties related to legal issues.
"From the perspective of monetary policy management, the State Bank sees that the Government has recently promoted public investment and investment in highway infrastructure. This is a very correct and accurate policy, because when the capital absorption capacity of enterprises is weak, it is necessary to promote public investment and investment in infrastructure to create a spillover effect on cash flow to enterprises. From there, reactivate credit for the banking system. In addition, the State Bank has also reported and recommended many times that when 95% of enterprises in Vietnam are small and medium-sized, there should be enhanced solutions such as guaranteeing enterprises when borrowing from banks, in order to promote higher credit," said Ms. Hong.
According to Governor Nguyen Thi Hong, another issue that delegates are also concerned about is that foreign currency deposit interest rates should be increased to mobilize capital from the people. Ms. Hong said that over the past years, the State Bank has taken many measures to combat "dollarization" according to the Party and State's policies. At the same time, together with ministries and branches, there are solutions to control inflation and increase the value of VND, to make VND more attractive and eliminate the benefits from hoarding USD.
"Therefore, bringing the USD interest rate to 0% is one of the solutions to encourage people with foreign currency to sell it to credit institutions and credit institutions to sell it to the State Bank to increase the State's foreign exchange reserves. At that time, there will be room to intervene to stabilize the foreign exchange market as in 2022 and the first months of 2024," Ms. Hong said.
Regarding the gold market, the State Bank believes that the high and complicated fluctuations in gold prices are also common in countries around the world, not just in Vietnam. Domestically, gold prices move in the same direction as world gold prices, however, the difference between domestic and international gold prices has widened, especially for SJC gold.
"The Government has directed the SBV and relevant ministries to perform their duties under Decree 24 to narrow the gold price gap. This is also a challenging task because the international gold price continues to fluctuate highly and complicatedly. In this situation, the SBV has increased supply to the market. Inheriting the method from 2013, the SBV has conducted bidding to increase gold supply to the market so that the gold price gradually decreases. However, after 9 bidding sessions, the gold price gap has not decreased as expected. Therefore, we have stopped bidding, re-evaluated the situation, found the cause and developed a new plan to implement next week. In particular, along with that, we will carry out transparent gold transactions in the market," Governor Nguyen Thi Hong affirmed.
The State Bank of Vietnam leaders affirmed that they have organized an interdisciplinary delegation to conduct a comprehensive inspection of all aspects, from invoices and documents to preventing money laundering related to gold transactions, and combating acts of speculation, price hoarding, and price hikes.
Also explaining and clarifying opinions related to gold prices, Deputy Prime Minister Le Minh Khai said that since June 2022, the Government and the Prime Minister have closely directed the State Bank, with 25 documents, including tools to intervene to stabilize the gold market. At the same time, inspections, checks and controls have been conducted.
According to the Deputy Prime Minister, the State Bank of Vietnam has recently actively proposed solutions, however, the effectiveness of the interventions has not been high. Currently, the State Bank of Vietnam is re-evaluating and will have new plans to stabilize the gold market in the short term.
In the long term, Deputy Prime Minister Le Minh Khai suggested that the State Bank study and amend Decree 24: "In the immediate future, we will use the State management tool of inspection and examination to substantially assess the operation of the gold market. From there, there will be solutions to handle according to regulations, to stabilize the domestic gold market in the spirit that the National Assembly deputies wish to move closer to the world market."
Source: https://vov.vn/chinh-tri/thong-doc-ngan-hang-nha-nuoc-neu-ly-do-dung-dau-thau-vang-post1098248.vov
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