Most important priority in 2023 to ensure liquidity

Speaking at the conference on January 3 to review 2022 and deploy tasks in 2023, Hong said that managing monetary policy in 2022 faced challenges in many areas, such as rising interest rates, record-high inflation, the appreciating US dollar, the fluctuation of the stock market, real estate, and domestic corporate bonds.

Thanks to calmness, good administration by the government and prime minister, and synchronous implementation of many SBV policies, by the end of 2022, monetary policy contributed significantly to strengthening the macroeconomic foundations.

In particular, it contributed to the consumer price index (CPI) only rising 3.15 per cent over last year, GDP growth reaching a record level of 8.02 per cent, and Vietnam's credit growth up nearly 14.5 per cent in 2022.

Additionally, money and foreign exchange markets are stable. The VND depreciated by about 3.15 per cent, and the interest rate increased by nearly 1 per cent in 2022, lower falls than in other countries in the region and world.

The governor said SBV learned three major lessons from monetary policy management in 2022.

Firstly, preparing flexible responses to fluctuations is important, helping Vietnam’s economy enhance its independence and initiative on its integration path. With large economic openness, Vietnam is inevitably affected by global fluctuations.

Secondly, the SBV is consistent in pursuing its goal of managing monetary policy for "controlling inflation, stabilising the macro-economy, and supporting economic growth," but it also needs to be flexible in determining the priority policies depending on the situation.

Thirdly, the impact of a policy is different for different economic sectors. Therefore, it is important to respond flexibly based on closely following the situation, considering each tool's appropriate timing and intensity to resolve difficulties and achieve targets.

Nguyen Thi Hong, Governor of the State Bank of Vietnam

According to the governor, in 2023, the global and domestic economic situation will face many difficulties. She cited that the International Monetary Fund’s chief Kristalina Georgieva recently said one-third of the world economy was expected to hit a recession and warned that this year would be tougher than last.

In Vietnam, core inflation tends to increase, and difficulties in the stock market, real estate, and corporate bonds still remain. Therefore, the governor pointed out the SBV’s major goals in 2023.

Firstly, the highest priority in 2023 is to ensure liquidity and maintain the stability and safety of the banking system.

The second is to continue to operate flexibly and synchronously monetary policy tools in line with fiscal policy and other macroeconomic policies to contribute to controlling inflation, stabilising the macro-economy, ensuring major balances of the economy, and stabilising the currency and foreign exchange markets.

The third is to manage credit appropriately, contributing to maintaining the economy’s recovery momentum and focusing credit capital flows on priority production and business. The SBV also promotes the implementation of tasks of the banking sector for the socio-economic recovery and development programme and a number of national programmes

The fourth is coordinating with ministries and branches to solve market difficulties.

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