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Tight monetary policies control inflation
The tightened monetary policies in place at present will reduce commodity volumes and increase inflation in the near future, a Nguoi Lao Dong (The Labourer) report yesterday cited experts as saying.
In recent months, the Vietnamese economy has improved with inflation in November at a low level of 0.35 per cent, interest rates having gone down and the surplus in balance payment has been around US$4 billion. Moreover, the nation has had foreign currency reserves of $14 billion, the report said.
However, it added, Viet Nam was suffering negative impacts of the current global economic situation. "The demand for foreign currency is going to increase because local enterprises will need to make international payments at the end of the year," it stressed.
Meanwhile, several tens of billions of dong (several billion dollar) have been withdrawn from banking system as interest rate has been regulated at 14 per cent per year. The monetary market has also been affected by the billions of dollars spent on importing gold.
The ban on gold borrowings by commercial banks has hindered capital mobilisation, the report said.
It cited international experts as saying that in the coming time, the tight monetary policies in Viet Nam could cause up-side-down impacts on the economy.
The Government has estimated credit growth this year at 14 per cent, and inflation has been brought under control.
Therefore, in 2012, the Government should loosen monetary policies, pay more attention to protecting the banking system and support enterprises, the Nguoi Lao Dong (Labourer) report said.
To do this, the Government should increase compulsory reserves in big banks and use the money to help small banks. It should also lift the 14 per cent limit on deposit rate and pledge to provide enough working capital in the form of short-term loans for enterprises.
"The Government should release a special recovery plan for the real estate market. If not, every effort to protect the banking system and restructure State-owned enterprises will fail," said Dr. Le Xuan Nghia, deputy chairman of the National Financial Supervisory Commission.
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