Monetary policy on track for success

June 10, 2011 | 20:24

(0) user say

Governor of the State Bank of Vietnam (SBV) Nguyen Van Giau has affirmed that national monetary policy was on the right track, with credit growth falling to 6.92 per cent in the first five months of the year.

illustration photo

Government Resolution 11 says this year’s credit growth must not exceed 20 per cent, with priority given to credits for business and production development, rural agriculture, support industries, exports, small and medium-sized enterprises, as well as the reduction of credits granted to real estate and stocks and other non-production sectors.

Credit growth was on the right track compared with the target, he said.

However, in agricultural production and exports in particular, credit growth reached 25 per cent.

In the non-production sector, credit growth dropped from 18.87 per cent by the end of 2010 to 16.9 per cent at the end of May, 2011.

The monetary policy has helped to stabilise foreign currency and gold markets and the SBV has bought a large volume of foreign currencies, while the domestic gold price is almost equal to world price.

World Bank Country Director Victoria Kwakwa in Vietnam said the implementation of Resolution 11 has had positive impacts on Vietnam’s economy.

However, she said, the nation needed continued efforts to avoid macroeconomic instability.

She suggested Vietnam continue to scrutinise state-owned enterprises and ensure strict management of public debt and acceleration of equitisation, and also to raise management efficiency and anti-corruption in the field and strongly cut public investment.

WB chief economic expert Deepak Mishra in Vietnam forecasts Vietnam’s inflation index will hit 22 per cent in June.

It will go down to 15 per cent, unless the Resolution is strictly implemented, he said.

The nation’s economic growth was predicted to be 7.5 per cent after 2012 when the macroeconomic foundations were expected to be more stable, he said.