SBV asked to take flexible monetary policy

August 26, 2011 | 11:13

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Deputy Prime Minister Vu Van Ninh urged the State Bank of Vietnam (SBV) to take a proactive and flexible monetary policy while working with the bank on August 25.

The Deputy PM spoke highly of the outcomes of the SBV’s move to manage the monetary policy over the past time and gradually reduce gold price and stabilise foreign exchange rate.

He also recorded positive changes in the credit structure with banks prioritising capital for agriculture and rural areas.

From now to the year-end, the central bank should focus on analysing difficulties facing businesses to put forth specific levels of priority for each of them while urgently completing a system of its mechanisms and policies and strengthening inspection and examination in the banking sector, Ninh said.

Regarding the gold issue, the SBV needs to promptly take specific long-term measures to stabilise the foreign currency market to gradually narrow the gap between domestic and international gold prices, he added.

The Deputy PM also asked the bank to continue keeping the deposit interest rate ceiling at 14 percent per year, creating conditions for credit organisations to lower lending interest rates.

The central bank will meet with commercial banks to seek a consensus on decreasing the lending interest rate to 17-19 percent per year, he said.

According to Ninh, to control VND credits, the SBV should inspect credit organisations which recorded high credit growths and had their non-production lending rates higher than the regulated level.

The bank needs to keep a close watch on developments of the gold and foreign currency markets to take suitable management measures. It also needs to build programmes to stabilise gold price and mobilise gold in the economy as well as prepare a decree on gold production and trading management and submit them to the Government, Ninh said.