|
PM urges economic stability
PM Dung has asked the State Bank, Finance Ministry to ensure banking system is secure.
Prime Minister Nguyen Tan Dung has asked the State Bank of Viet Nam (SBV) and the Ministry of Finance to implement measures to ensure the stability and safety of the banking system.
The request came after the Prime Minister met senior Government officials on Thursday to discuss moves to bolster the economy in response to changes in the US and global financial and credit markets.
The US financial crisis has not had a direct impact on Viet Nam’s economy but it has influenced indirectly on finance, the currency, commerce, services and foreign investment, said Dung.
The Prime Minister called on the SBV to closely monitor the activities of commercial banks, particularly in regard to loans, in high-risk sectors such as real estate and multi-sector investment.
Dung also asked the SBV to look into the bad debt situation and the strength of credit institutions, in addition to finalising regulations on debt selling and purchasing, while setting up an organisation specialising in buying, selling and dealing with hard-to-recover debt. He asked the SBV to submit to the Government for approval regulations on merging, buying back and bankrupting banks that have problems to create a legal foundation for implementing a policy to restructure weak commercial banks and credit institutions to ensure the safety of banking system.
Dung urged the finance ministry to review the operation of financial institutions and financial investment funds, as well as building regulations on licensing the establishment and operation of stock, insurance and fund management companies.
The ministry and the SBV were asked to direct commercial banks and economic groups to review deposits and investment in foreign commercial banks and financial organisations, as well as loans to these banks and organisations. He also called for the review of the investment operations and business activities of foreign investment banks in Viet Nam.
The finance ministry was required to guide the State Securities Commission to watch and control capital sources of foreign investment, as well as handle difficulties with administrative procedures in stock activities to boost capital attraction and the sustainable development of the securities market.
The Prime Minister called on the Ministry of Industry and Trade to review and boost imports and exports. He also asked the Ministry of Planning and Investment to work with the SBV to review the implementation of investment projects both inside and outside the country to quickly detect and deal with problems, along with speeding up the implementation of much-needed projects along with scrapping unnecessary ones.
Deputy Prime Minister Nguyen Sinh Hung is entrusted to guide relevant ministries and agencies to watch, appraise and put forth measures to mitigate the negative effects of the current financial crisis on Viet Nam’s economy.
Dung also asked relevant ministries and agencies to adopt eight groups of measures to curb inflation, stabilise the macro-economy, ensure social security and sustainable economic growth.
These measures include implementing tighter monetary policies and flexible management to ensure the liquidity of the banking system, while managing interest and exchange rates and boosting the use of foreign currency reserves to speed up exports and reduce imports, curb inflation and achieve sustainable economic growth.
Economy looks bright
While Viet Nam’s economy continues to look bright, some short-term challenges are still to come, particularly concerning economists and managers who cannot anticipate the full impact of the US financial crisis on Viet Nam.
Economists made these conclusions at the 2008 Economic Forum, held by the Central Institute for Economic Management (CIEM), under the Ministry of Planning and Investment, and the German Organisation for Technical Co-operation (GTZ) in Ha Noi on Thursday.
At the forum entitled "Stabilising macro economy – challenges and solutions" around 100 economists and managers presented reports and addressed the effectiveness of State investment capital, financial policies, trade and international payments, monetary and exchange rate policies, banking systems, real estate markets, stock markets, and the implementation of policies to manage a number of consumer goods and ensure social security in the current economic situation.
The participants included representatives of the World Bank, the Asian Development Bank and the German Embassy.
Many participants addressed the need to make use of correct economic policy and raise the quality of economic forecasting.
According to CIEM, Viet Nam’s economic growth rate may reach between 6.5 or 6.6 per cent this year, while inflation is forecast at about 25 per cent.
CIEM forecasts that next year’s economic growth rate will be between 6 and 6.5 per cent. While the economy has seen positive signs recently, it will remain unstable until the end of this year, according to economist Vo Tri Thanh.
Thanh, Chairman of the Department for Research of International Economic Integration Policy under the Central Institute for Economic Research and Management, cited outstanding economic achievements in the first nine months of this year that demonstrated that the Government’s eight solutions to boost the economy were helping.
One of those factors was the slowing of the consumer price index (CPI) in recent months. In September, the CPI rose just 0.18 per cent over the previous month, the lowest monthly rise so far this year. The trade deficit showed an initial improvement as total import value dropped to US$5.8 billion in September, down from almost $6.3 billion in August. The flexible monetary policy that is currently in place has helped stabilise the foreign currency market and increase securities prices.
Regarding challenges and risks to the Vietnamese economy during the remaining months of this year, Thanh said that the prices of some consumer goods and services, such as electricity, would be kept in check despite the fluctuation in global oil prices. When coupled with the effects of salary increases, these fluctuations can result in a high risk of inflation.
According to Thanh, the challenges that lie ahead include attracting investment capital from overseas under the current instability of the global economy.
He said that, in order to keep the economy stable, it is necessary to co-ordinate both macro and micro-economic policies, continue the process of administrative reform and implement a strict monetary policy. These objectives must be taken while continuing to ensure an adequate supply of capital for important projects and improve the management capacity of State agencies in supervising financial and monetary issues.
According to Nguyen Hong Son, deputy principal of the Economics College at Ha Noi National University, these are challenging times for the State Bank of Viet Nam to reassure people and investors of adequate financial and monetary policies.
Tran Dinh Thien, deputy head of Viet Nam Economics Institute, said monetary policy (with interest rates as a primary tool) was the main solution to control inflation. While adjusting rate was effective, it does create difficulties for enterprises, especially private ones, he said.
SBV
|
