Wednesday, May 19, 2010

Ensuring High Growth and Contain Inflation for Vietnamese Economy

Recently, Vietnamese Prime Minister Nguyen Tan Dung has requested that State Bank needs to have consistent measures of positive monetary policy solutions, ensure macroeconomic stability, control inflation increase and boosting economic growth rates as Congressed had proposed.

Ensuring Macroeconomic Stability
At the State Bank of Vietnam (SBV), Prime Minister Nguyen Tan Dung chaired a meeting with the SBV on the implementation of directions given by the government and the prime minister, which aimed to ensure macroeconomic stability, control inflation increase and achieve the economic growth level of approximately 6.5 percent in 2010.

In attendance at the meeting, were the State Bank Governor Nguyen Van Giau, Finance Minister Vu Van Ninh, Minister of Industry and Trade Vu Huy Hoang, leaders of the government office, the Ministry of Planning and Investment, the Committee of National Finance Monitoring and other State-owned commercial banks.

Economic Growth Rate and GDP
Prime Minister Nguyen Tan Dung highly praised the efforts of the entire banking sector, which have positively contributed to the economic growth rate with the Gross Domestic Product (GDP) reaching 5.83 percent in the first quarter of 2010, fundamental macroeconomic stability is firm, social security and people's lives have improved, and market rate premises are declining.

Emphasizing on future tasks, Prime Minister Nguyen Tan Dung requested the banking sector to continue to try harder, thoroughly and firmly manage in a timely manner, base on the foundation of having a firm grasp of the reality to uniformly coordinate so that economic targets proposed by Congress can be implemented.

Measures To Improve Efficiency
The SBV was asked to have consistent measures of positive monetary policy solutions to execute comprehensively, practically, uniformly and effectively, to ensure that credit growth rate at about 25 percent and liquidity growth at approximately 20 percent. In addition, the SBV was asked to proactively apply necessary measures to improve efficiency, credit quality and financial capacity of credit institutions.

The prime minister also asked SBV to actively and flexibly manage, be cautious in the use of monetary policy tools following market principles, to ensure that they are consistent with development objectives and realistic circumstances of the financial market, the currency and the economy of our country.

Furthermore, the SBV was requested to pay attention in directing and guiding commercial banks to process loans according to the interest rate mechanism in agreement with production projects and efficient trading as outlined in the Resolution of Congress.

The SBV was asked to flexibly manage exchange rates and the foreign exchange market in relation to interest rates of the Vietnam Dong and foreign currencies, the consumer price index, trade balance and channel investments towards stability, contribute to encouraging exports and limit imports over exports.

Stability and Safety
In addition, the SBV was requested to strengthen the strict control of business activities of credit institutions; strengthen inspection and supervision to assess actual operation of each credit institution and the entire system of credit institutions, to gradually improve the competitiveness of domestic commercial banks, to ensure stability and safety of the financial and banking system.

In adjacent to that, the SBV was asked to be more proactive and active in providing official information, especially the financial sector, currency and price to guide public opinion, to contribute to fulfilling the duty of propaganda about the guidelines, policies, direction and operation of the government in the economic and social development. The prime minister had requested a monthly report by the SBV to the government on implementing measures of monetary policy.

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