Also attending the meeting were Governor of the State Bank of Vietnam Nguyen Thi Hong, leaders of the State Bank of Vietnam, the Government Office, the Ministry of Planning and Investment, and the Ministry of Finance.
Earlier that morning, concluding the regular Government meeting in July, Prime Minister Pham Minh Chinh clearly stated the goal in the last months of the year is to continue to maintain macroeconomic stability, control inflation; at the same time promote stronger growth, ensure major balances and have higher surpluses, well control public debt, government debt, foreign debt, budget deficit; ensure national monetary and financial security.
According to the report of the State Bank at the meeting, in the first 7 months of 2024, closely following the policies of the Party, the National Assembly, the Government, and the direction of the Prime Minister, the State Bank has proactively followed domestic and foreign economic developments to synchronously deploy solutions to create favorable conditions for businesses and people to access bank credit, restore production and business, increase capital absorption capacity, promote growth associated with macroeconomic stability, control inflation, and ensure the safety of the credit institution system.
As of July 31, the central exchange rate was at 24,255 VND/USD, up 1.63% compared to the end of 2023, a low and stable average compared to currencies in the region and the world.
Interest rates for new and old loans continued to decrease. By the end of June 2024, the average lending interest rate was 8.3%/year, down 0.96% compared to the end of 2023; the average deposit interest rate was 3.59%/year, down 1.08%/year compared to the end of 2023.
Credit growth of the whole system recovered from the end of March and gradually increased over the months, higher than the growth rate in the same period in 2023, reaching 6% by the end of the second quarter of 2024 according to the direction of the Government and the Prime Minister.
By the end of July 2024, outstanding credit balance was nearly VND 14.33 trillion, up 14.99% over the same period in 2023 and up 5.66% over the end of 2023.
The State Bank, ministries, sectors and localities coordinate to implement sectoral and sectoral credit programs such as: The VND120 trillion credit program for loans to develop social housing, worker housing, and apartment building renovation and reconstruction projects; and the credit program for the forestry and fishery sectors, with a cumulative total of VND34.4 trillion.
After listening to opinions and making a concluding speech, Prime Minister Pham Minh Chinh emphasized that monetary policy plays a very important role, banking activities are the lifeblood of the economy; good monetary policy management will create favorable conditions and foundation for the development of the country in general and economic sectors in particular.
Therefore, the Government and the Prime Minister regularly hold meetings and work with the State Bank and relevant agencies to ensure a smooth and effective monetary policy, serving the development of the country, people and businesses, avoiding errors that affect the macro economy and general development, while ensuring the safety of the national banking and financial system, especially when the situation fluctuates.
The Prime Minister assessed that the practical situation in recent times shows that the Government's orientation from the beginning of the year on "proactive, flexible, timely and effective monetary policy" is basically appropriate and has been seriously and effectively implemented by the State Bank in the context of many difficulties and challenges, harmoniously combined with other policies on fiscal, trade, investment, real estate, etc., contributing to us basically achieving the set goals of stabilizing the macro economy, controlling inflation, promoting growth in all three sectors, ensuring major balances of the economy and having surpluses.
The Prime Minister welcomed and commended the efforts of the State Bank and the entire banking system in implementing monetary policy, contributing to the socio-economic development goals; and they need to continue to be promoted and further promoted in the coming time.
According to the Prime Minister, we have a good macroeconomic foundation, and international financial organizations have forecast a positive outlook for the Vietnamese economy. However, monetary policy management and banking system operations still face immediate and long-term difficulties when inflationary pressure remains high, interest rates tend to increase, credit growth has not met requirements, demand for loans increases at the end of the year, foreign currency demand increases, and risks from geopolitical tensions in the world... Along with that, the amount of money people deposit in banks is currently over 15 million billion VND, the Prime Minister requested that there should be solutions so that this capital source can effectively serve production and business.
The Prime Minister stated that in that context, it is necessary to be extremely calm, confident, and maintain one's courage, "not arrogant in victory, not discouraged in defeat". On the other hand, affirming that agencies are increasingly mature and have more management experience, the Prime Minister pointed out a number of experiences such as managing based on data, referring to international experience but suitable to Vietnam's conditions and circumstances, meeting immediate and long-term requirements; managing without jerkiness, coordinating policies synchronously; giving messages and policies that are clear, decisive, and suitable to reality and saying is doing, committing to implementing; drawing on experience to do better and expanding credit packages to encourage growth drivers.
Identifying that the coming time will have more difficulties and challenges than opportunities and advantages, the Prime Minister requested agencies to continue to closely follow developments, grasp the situation at home and abroad; find and exploit opportunities and advantages, maximize the country's unique potential, outstanding opportunities, and competitive advantages; respond to policies appropriately, promptly, and effectively, learn from experience while doing, expand gradually, not be perfectionist, not hasty; closely combine monetary policy with other policies to promote growth, control inflation, stabilize the macro economy, and ensure monetary security.
Regarding monetary policy, the Prime Minister requested to continue to consistently implement Conclusion 64 of the Central Committee on socio-economic development in 2023-2024; proactively, flexibly, promptly and effectively manage; coordinate synchronously, harmoniously and closely with other policies.
Specifically, credit growth should be managed at around 15%, focusing on traditional growth drivers and new growth drivers. Exchange rate should be flexibly managed using various tools. Continue to direct and mobilize banks to reduce costs, apply information technology, and digital transformation to reduce lending rates for growth drivers and infrastructure projects; in which, state-owned commercial banks should take the lead in implementing "harmonized benefits and shared risks".
At the same time, operate open market operations in accordance with market developments. Operate flexibly, harmoniously, reasonably, and balance interest rates and exchange rates. Operate credit in accordance with macroeconomic developments and inflation, meeting capital needs for the economy; withdraw unused credit growth targets from credit institutions and supplement them for credit institutions with growth potential. Continue to monitor and urge credit institutions to resolutely implement incentive programs. Accelerate digital transformation of banks, reduce costs, fight negativity, and benefit the people.
At the same time, strengthen the management and control of the gold and foreign currency markets in a fundamental and methodical manner. Promote the handling of bad debts, drastically implement the Project "Restructuring the system of credit institutions associated with handling bad debts in the period 2021-2025"; focus on effectively implementing the plan to handle weak credit institutions; restructure commercial banks under special control according to the direction of competent authorities. Improve information and communication work, focus on clear and transparent communication about the products of credit institutions, improve people's understanding. Strengthen supervision and inspection, increase publicity and transparency.
The Prime Minister welcomed the State Bank's proposal to increase the credit package of 120 trillion VND for preferential loans for the development of social housing and workers' housing to 140 trillion VND with an increased loan term and reduced interest rates; requested to study appropriate access conditions and find ways to make this credit package work because this is a humane policy, helping people in difficulty have a place to live.
Regarding other policies, the Prime Minister requested the Ministry of Finance to take the lead in implementing fiscal policies towards increasing revenue, saving expenditure, reducing fees, charges, and VAT; promoting public investment, using public investment to lead private investment and activating all social resources; issuing government bonds with reduced interest rates for key projects, works, and national target programs; promoting development, determined to upgrade the Vietnamese stock market from marginal to emerging; promoting electronic tax collection.
Regarding trade and investment, the Ministry of Industry and Trade, the Ministry of Planning and Investment, and the Ministry of Foreign Affairs will boost exports, striving to achieve a record import-export of about 750-800 billion USD and a trade surplus of over 20 billion USD. Expand payments in local currencies with other countries. Promote and stimulate domestic consumption, prevent smuggling, counterfeit goods, and fake goods, boost border trade, effectively exploit signed FTAs and negotiate and expand new FTAs. Promote foreign economic relations, diversify markets, products, and supply chains, especially Halal food. Boost investment (including state and private investment, ODA preferential capital, and especially FDI attraction and disbursement). Synchronously, resolutely, and effectively implement new laws such as the Land Law, Housing Law, Real Estate Business Law, and Law on Credit Institutions.
The Prime Minister once again emphasized the spirit of the meeting is to maintain, promote and boost the effectiveness of what has been done in managing monetary policy and other policies, believing that the banking sector and ministries and branches have done well and must do even better in the coming time, contributing to the rapid and sustainable development of the country's socio-economy and national development.
(According to Government Electronic Newspaper)
Source: https://vietnamnet.vn/thu-tuong-dieu-hanh-chinh-sach-tien-te-chu-dong-linh-hoat-kip-thoi-hieu-qua-2308930.html
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