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Banking system stable but cautious stance to continue: Central bank
The banking system is safe and stable but caution is still needed amid the continuing global financial crisis, the central bank chief said.
After 23 banks around the world were taken over or went bankrupt in the first quarter, the State Bank of Vietnam is closely monitoring the activities of Vietnamese banks, Governor Nguyen Van Giau said Monday in an interview published on the government website.
The priority for the banking system is to remain stable since its operations depend mainly on the confidence posed in it by people and businesses, he said.
The central bank would continue its efforts to keep the banking system secure and review banking and risk management regulations to comply with international standards, he said.
It would maintain a bias toward an easier monetary policy to support the government’s efforts to boost the economy, while keeping prices, interest rates and forex rates stable.
“The State Bank of Vietnam will continue to enact monetary policy in the direction of loosening in a way that is appropriate,” he said.
The economy is expected to face more difficulties in the next few months as both exports and foreign investment continue to fall.
The central bank would maintain flexibility in using instruments of monetary policy, keeping them in sync with fiscal and trade policies to stabilize the monetary market, he assured.
The State Bank of Vietnam has said it would keep key interest rates steady in May. Loans outstanding at banks expanded by 11.16 percent between the end of 2008 and the end of April, while money supply rose 11.4 percent in the same period, Giau said.
Lending picked up strongly last month under the government stimulus package, accounting for the bulk of the four-month growth after an expansion of just 2.67 percent until the end of March.
Commercial banks said they have recently raised interest rates further or are offering cash bonuses for dong deposits to attract the funds needed to fuel lending.
The central bank has projected credit growth this year at 21-23 percent after its monetary tightening measures to contain inflation early last year slowed loan growth to 21-22 percent from 54 percent in 2007.
thanhnien, reuters
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