Businesses complain that when they need money, it is difficult to borrow, but when banks have money, they do not need to borrow. What does the State Bank say?

ANTD.VN - The State Bank said that monetary policy management is under a lot of pressure, having to balance tasks and goals that are intertwined and sometimes even conflicting.

In a recent petition sent to the State Bank of Vietnam (SBV), voters reflected: In recent times, the management of monetary policy has had a great impact on businesses. Specifically: At the end of 2022, borrowing capital encountered many difficulties because commercial banks had a policy of collecting money quickly, not allowing businesses to mature; Currently, commercial banks have excess money to lend, but many businesses no longer need it.

Therefore, voters suggested that the State Bank study and operate monetary policy more flexibly, consistently and stably to help businesses feel secure and proactive in investing in production and business.

Monetary policy management under pressure

Responding to this proposal, the State Bank said that in recent times, closely following the direction of the Government and the Prime Minister, the State Bank has operated monetary policy tools synchronously and flexibly, closely coordinating with fiscal policy to aim for the highest goal of stabilizing the macro economy , controlling inflation, and supporting appropriate economic growth recovery.

However, with the characteristics of a small economy with high openness, Vietnam's economy is easily affected by unusual fluctuations in the world market. Monetary policy management on domestic interest rates and exchange rates is under pressure from monetary policy adjustments at major central banks in the world.

In that context, monetary policy management must balance the intertwined tasks and goals, sometimes even conflicting ones, in controlling inflation, stabilizing the macro-economy, supporting economic recovery, stabilizing the monetary and foreign exchange markets, ensuring the safety of the credit institution system, enhancing flexibility in management, and creating policy space to increase the ability to absorb external shocks.

For example, at the end of 2022, in the context of high global inflation, a strong appreciation of the USD, and the Fed's rapid and strong tightening of monetary policy increased pressure on domestic interest rates and exchange rates, creating pressure on inflation.

Along with that, the incident at Saigon Commercial Joint Stock Bank (SCB) put great pressure on the currency market, the State Bank adjusted the operating interest rate up by 0.8-2%/year in September and October 2022 to contribute to controlling inflation, stabilizing the macro economy, supporting the stability of exchange rates and the foreign exchange market.

“This is a timely solution, in line with the general trend of increasing interest rates worldwide to prioritize inflation control, stabilize exchange rates, create new room for adaptation to market fluctuations, contributing to stabilizing the macro economy and ensuring system safety,” said the State Bank.

Ngân hàng Nhà nước cho rằng việc điều hành chính sách tiền tệ chịu rất nhiều áp lực

The State Bank believes that monetary policy management is under a lot of pressure.

In the first months of 2023, when market conditions permitted and to aim at supporting economic growth recovery according to the policy of the National Assembly , the direction of the Government and the Prime Minister, the State Bank of Vietnam continuously adjusted down the operating interest rates 4 times with a reduction of 0.5-2.0%/year, in the context that world interest rates continued to increase and remained at high levels, thereby creating conditions to reduce the lending interest rate level, supporting businesses and people to borrow capital for production, business and consumption.

Credit management in accordance with practice

Regarding credit management, for 2022, from October 2022, after the mass withdrawal event occurred at SCB and showed signs of spreading to a number of credit institutions, greatly affecting the liquidity of the system, credit institutions must increase liquidity assurance and limit the ability to provide more credit.

By December 2022, a number of credit institutions had run out of or were close to their credit targets, and as market liquidity improved and market sentiment gradually recovered, the State Bank adjusted the credit growth target for the entire system by 1.5-2% on December 5, 2022 to create conditions for credit institutions with the ability to increase credit to provide additional capital to support economic growth.

Thanks to that, credit growth of the entire banking system in 2022 reached 14.18% (the highest in the past 5 years).

Thus, the State Bank believes that the State Bank's credit management in 2022 is appropriate, timely, and harmoniously resolves a number of challenges in the context at that time.

Specifically, credit management must support economic growth while still ensuring system safety, while monetary indicators such as credit/capital mobilization and credit balance/GDP of Vietnam have been and are at warning thresholds, the real estate market and corporate bond market face many difficulties;

At the same time, ensure stable operation of the credit institution system when the market is strongly affected by the unprecedented incident at SCB bank, greatly affecting liquidity and depositor confidence.

In addition, in addition to maintaining and fully meeting the operational safety indicators as prescribed by the State Bank, credit expansion/contraction also depends on the business strategy, risk appetite, and operational characteristics of credit institutions in each period.

“In case of receiving complaints and feedback from customers about credit institutions intentionally not complying with legal regulations on banking activities and credit granting, the State Bank will consider and handle them, ensuring that credit activities take place smoothly, safely and effectively,” said the State Bank.

In 2023, from the beginning of the year, the State Bank announced the credit growth target for each credit institution and by July 2023, in the context of difficult economic growth and capital sources in the economy facing difficulties, the State Bank adjusted the credit growth target with the system-wide level equal to the 2023 target.

Although the State Bank has drastically implemented many solutions, credit growth of the entire system is lower than the target set at the beginning of the year and the level that the State Bank has announced to credit institutions.

Along with that, the credit growth rate is uneven, therefore, the State Bank has proactively and flexibly adjusted the credit growth target in the whole system from credit institutions that have not fully utilized the target to credit institutions that need to continue to expand, from November 29, 2023.

The SBV also said that in 2024, continuing to closely follow the Resolution of the National Assembly, the direction of the Government and the Prime Minister, to create favorable conditions for credit institutions to provide credit capital to meet economic growth needs, the SBV has issued a plan to orient credit growth in 2024 at about 15%, with appropriate adjustments to developments and actual situations, assigning all credit growth targets oriented from the beginning of the year and announcing the principles for calculating credit growth targets so that credit institutions can determine their own credit growth targets.

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