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Anti-inflation tools
Macroeconomic management in the second half of the year requires patience and consistency in the implementation of monetary policy to keep the rate of inflation below 17 percent.
The government has two major tools for combating inflation – monetary policy and fiscal policy. The implementation of these policies in recent times has proved to be on the right track.
The National Assembly’s Economic Committee recently reported that the foreign currency market and the rate of foreign exchange remain stable while the state’s foreign currency reserve is increasing. The stability of foreign exchange rate has built up investor trust in the prospect of Vietnamese economic recovery.
Economic experts say Vietnam has succeeded in balancing the official and unofficial rates of foreign exchange.
However, they warn that the Vietnamese economy is still confronted with the lack of US dollars, trade deficit, and depreciation of the domestic currency.
Huynh The Du, a lecturer for the US Fulbright economics teaching programme says, “It’s likely that the VND will further depreciate from now until the end of the year. He insists that the exchange rate policy should be more flexible. If the State Bank buys US dollars now, it will have to sell them by the end of the year.
Du proposes improving the competitiveness of Vietnamese goods, and gradually balancing the trade deficit.
Dr Le Xuan Nghia, Vice President of the National Monetary Supervision Committee, says Vietnam would stick to the tightening of monetary policy as in early this year to avoid repetition of the 2010 inflation story.
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