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SBV receives five important tasks from the government
The State Bank of Vietnam (SBV) was asked to concentrate on some important tasks set by the government, the bank announced on January 12.
SBV was tasked to actively and flexibly manage the monetary policy and cooperate with the Ministry of Finance and other related ministries. The coalition aims to combine monetary policy and fiscal policy to control increase in the general payment methods, credits and to keep interest rates at a reasonable level.
The Bank should decide the exchange rates promptly due to fluctuations in the market, and strengthen the forecasting capacity and balance the supply of money to meet the market liquidity of the banking system and reduce the inflation rate.
SBV should work with the Ministry of Finance and other departments to strengthen surveillance of the input-output capital, especially the foreign indirect investment (FII). It should also create preferential conditions to attract more remittances for controlling the foreign currencies market while stabilising the balance of payments and increasing foreign currency reserves.
It should use suitable monetary policies to encourage commercial banks to provide loans for producing goods which have large export markets.
To maintain the monetary, credit and banking system, SBV should cooperate with other agencies and localities to implement the following solutions:
Firstly, SBV should find ways to reduce the interest rates of business loans for credit institutions, to ensure the stabilisation of the macro economy, improve people’s living standards and support the commercial banks. This will allow to provide loans for developing agriculture, rural areas, small and medium sized businesses, export businesses and businesses working in the support industries while minimising the use of administrative measures.
Secondly, the Bank should continue improving the legal framework on foreign currency management and control the foreign currency market and exchange rates in line with the supply and demand for foreign currencies. It should encourage exports, reduce imports, improve the international balance of payments and contribute to reserving foreign currencies. The Bank should also research, amend and add more regulations on the management of the international balance of payments.
Thirdly, SBV should implement comprehensive measures to control the gold market, prevent and strictly oppose the illegal businesses of trading gold or exchanging foreign currencies. The Bank should survey the transparency of information in the gold and foreign currency markets and determine solutions to control the capital and credit flow between these two markets.
It should also create regulations on the trading of gold towards improving the ruling role of the state and strictly controlling the circulation of gold bars. SBV should propose solutions to the dollarisation issues and transform the domestic mobilisation and loans using foreign currencies by credit institutions to the trading of foreign currencies and submit them to the Prime Minister in the first quarter of 2011.
Fourthly, SBV should also submit a project to strengthening non-cash payment for the 2011-2015 period in the second quarter of this year.
Lastly, the Bank should continue to revise regulations related to credit and banking safety in accordance with international regulations and national socio-economic situations. The Bank should direct credit institutions to sustainably restructure their assets and capital resources. SBV should improve the quality of credit, warn early of system risks and support commercial banks and credit institutions in dealing with risks to ensure the safety of their systems.
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