Accurate and fair assessment of monetary policy and macroeconomic management

Prime Minister Pham Minh Chinh chaired a meeting of the Government Standing Committee with commercial joint-stock banks to discuss solutions contributing to socio-economic development. (Photo: Duong Giang/VNA)

Following meetings with major private corporations and businesses, on the afternoon of September 21st, Prime Minister Pham Minh Chinh chaired a meeting of the Government Standing Committee with commercial joint-stock banks to discuss solutions contributing to the socio-economic development of the country.

Also attending were Deputy Prime Ministers Tran Hong Ha, Le Thanh Long, and Ho Duc Phoc; Ministers and heads of ministerial-level agencies; leaders of central ministries and agencies; and leaders of 13 major joint-stock commercial banks nationwide.

In his opening remarks at the conference, Prime Minister Pham Minh Chinh stated that the conference aimed to evaluate monetary policy, especially prioritizing growth, controlling inflation, ensuring major balances, and stabilizing the macroeconomy. He requested delegates to contribute accurate and fair assessments of the government's and the State Bank of Vietnam's monetary policy and macroeconomic management, including issues related to liquidity, interest rates, exchange rates, credit limits, credit growth, and lending rates in the current context, and to propose tasks and solutions for monetary policy in the coming period.

The Prime Minister stated that so far, we have maintained macroeconomic stability, controlled inflation, and ensured major balances. However, recently, Typhoon No. 3 caused severe damage due to its high intensity, rapid speed, strong gusts of wind, prolonged duration on land, and widespread flooding caused by its remnants, resulting in heavy losses of life and property. Furthermore, the storm and floods disrupted production and business activities, significantly impacting the macroeconomic situation.

Therefore, the Prime Minister hopes that banks will propose new policies to adapt to the situation, including policies for businesses and people affected by the storms and floods; and at the same time, suggest solutions related to credit growth and reasonable interest rates with the spirit of harmonizing benefits, sharing risks, and harmonizing the interests of the State, people, and businesses with the spirit of "mutual support and compassion," "national solidarity and brotherhood" to have appropriate policies, listen and understand together; share vision, awareness and action together; work together, enjoy together, win together and develop businesses and the country, leaving no one behind.

The head of government urged banks to share the burden during this difficult time for the country, especially regarding interest rates, to support people and businesses in overcoming difficulties, and to contribute to the commercial banking system; demonstrating the spirit of national unity, overcoming difficulties, and leading the country to rapid and sustainable development.

Prime Minister Pham Minh Chinh presided over the conference. (Photo: Duong Giang/VNA)

The Prime Minister stated that the recent 10th Central Committee Conference of the 13th Party Congress was very innovative, demonstrating a determination to promote three strategic breakthroughs: innovation, science and technology as prerequisites for development, using stability for development, and using development to ensure stability; accelerating key national projects such as the North-South high-speed railway; completing the expressway system; researching and developing energy infrastructure, especially nuclear energy infrastructure; developing infrastructure to combat climate change; placing the people at the center, as the subject, goal, driving force, and resource for development; focusing on decentralization and delegation of power to ministries, sectors, and localities, with the central government and ministries making policies, planning, and conducting supervision and inspection, while localities must make decisions, implement, and take responsibility.

Emphasizing the need to resolutely eliminate cumbersome administrative procedures that affect citizens and businesses; encouraging innovation, boldness in thinking, daring to act, and daring to take responsibility, the Prime Minister expressed his readiness to listen to the contributions of banks with an open mind in order to find solutions that contribute to the development of the country.

According to the State Bank of Vietnam, in the first eight months of 2024, closely following the policies of the National Assembly, the Government, and the directives of the Prime Minister, the State Bank proactively monitored domestic and international economic developments to implement comprehensive solutions to facilitate businesses and individuals' access to bank credit, overcome difficulties, and restore production and business activities, contributing to promoting economic growth while maintaining macroeconomic stability, controlling inflation, and ensuring the safety of the credit institution system.

The State Bank of Vietnam proactively and flexibly manages monetary policy, balancing interest rates and exchange rates harmoniously; directs credit institutions to reduce lending interest rates and support the liquidity of the credit institution system; promotes the implementation of solutions to boost credit growth, increase access to credit, and credit programs for specific sectors; perfects the legal framework in credit granting activities, contributing to improving access to bank credit and supporting customers facing difficulties in credit operations; promotes the implementation of digital transformation solutions in banking operations, promotes cashless payments to develop technology-based products and services, and ensures continuous, smooth, and secure operations.

As of September 17, 2024, credit growth across the entire system reached 7.38% compared to the end of 2023. Of this, private joint-stock commercial banks grew by 8.6%, accounting for 45% of the market share, the highest growth in the entire system. The credit structure is consistent with the economic restructuring orientation, continuing to focus on production and business activities and priority sectors.

The total assets of 28 joint-stock commercial banks as of June 30, 2024 reached VND 9.3 million billion, accounting for 45% of the market share, of which 22 banks had assets exceeding VND 100 trillion. The total mobilized capital of the joint-stock commercial banking sector reached VND 8.7 million billion, an increase of 5.44% and accounting for 46.1% of the market share.

The business results of joint-stock commercial banks were quite good. The after-tax profit of the private joint-stock commercial banking sector in the first six months of 2024 reached approximately 44,000 billion VND…

A view of the conference. (Photo: Duong Giang/VNA)

At the conference, delegates frankly assessed that non-performing loans and potential non-performing loans in the banking system are on the rise, with the risk of further increases following the continuation of policies to restructure repayment terms and maintain loan classifications; the absorption of credit by businesses and individuals remains low; pressure on bank credit continues to increase; the real estate market has not yet recovered and stabilized, affecting many related industries as well as consumer demand for housing; the global economy is experiencing slow and complex growth, and interest rates remain high, impacting domestic interest rates and exchange rates.

In particular, natural disasters, storms, and floods have caused significant damage, affecting the lives and business activities of customers, leading to difficulties for commercial banks as well.

Source: https://baodaknong.vn/thu-tuong-danh-gia-chinh-xac-cong-bang-ve-chinh-sach-tien-te-dieu-hanh-vi-mo-229836.html