What are the 7 major monetary policy management plans to be implemented in 2023?

2023 will remain a year full of difficulties and challenges for the government’s macroeconomic and monetary policy management. On the morning of January 8, the State Bank of Vietnam (SBV) held a meeting to deploy banking industry tasks for 2024. Prime Minister Pham Minh Zheng attended and chaired the meeting.

In her speech at the opening ceremony of the meeting, Nguyen Thi Hong, Governor of the State Bank of Vietnam, said that 2023 will still be a year full of difficulties and challenges for the government’s macroeconomic and monetary policy management. However, some business plans and results achieved by the banking industry in 2023 are as follows:

First, monetary policy control helps stabilize the macroeconomy and control inflation at around 3.2% to 3.4%. To support the liquidity of credit institutions, stabilize currency and foreign exchange markets, the National Bank purchases foreign currency to increase the country’s foreign exchange reserves. Stable inflation and growing foreign exchange reserves were factors in Fitch’s upgrade of Vietnam’s country credit rating.

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Second, the operating interest rate has been lowered four times in a row. Against the background that world interest rates continue to rise and are anchored at high levels, the reduction rate is 0.5-2.0%/year, creating conditions for lowering market loan interest rates. At the same time, credit institutions are guided to reduce costs and simultaneously take measures to lower loan interest rates. As of now, the new transaction deposit and loan interest rates of commercial banks have dropped by more than 2.5% per year compared with the end of 2022.

The third is to flexibly manage the exchange rate based on domestic and international situations, which can help absorb external shocks, stabilize the foreign exchange market, limit short-term large fluctuations in exchange rates, and stabilize currency values; liquidity is smooth, and legal demand for foreign currency is fully met.

Fourth, the National Bank has simultaneously and aggressively implemented multiple solutions, policies and credit plans, pooling all resources to ensure an adequate supply of economic capital and promote economic growth for about five years. (highest growth rate in the world), support enterprises and the masses to overcome difficulties and resume production and operations.

In particular, we strive to improve the legal framework for loans, simplify procedures, reduce loan documents, and promote the connection between banks and enterprises across the country; increase specific credit plans and products, incentives… to create more favorable conditions for individuals and enterprises to obtain bank credit.

It has implemented a number of credit projects, implemented social policies, and contributed to the smooth implementation of three national goals and tasks, including sustainable poverty reduction, new rural construction, regional economic and social development, ethnic minorities, and mountainous areas. Thanks to the National Bank’s simultaneous guidance and resolution system, credit will grow by 13.71% by December 31, 2023 compared to the end of 2022.

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Fifth, we will continue to maintain the stability and security of the credit institution system and protect the legitimate rights and interests of depositors. Bad debts are dealt with and controlled in the context of many difficulties in the economy and production and operations, affecting the company’s ability to repay debts.

Sixth, the non-commercial payment index is growing positively; in 2023, the number of non-cash transactions will increase from 50.3% to 99.1%, and the amount will increase from 5.4% to 10.8%, depending on the payment method; the payment system operates stably, smoothly and securely. The banking industry is also a pioneer in digital transformation; many products and services provided to customers have been digitized, and many of its operations have been 100% digital, helping to support access to banking services, reduce economic costs, improve productivity and national competitiveness.

Seventh, we will continue to strive to improve the legal system for currency and banking activities to ensure the safe operation of the banking system, while closely following actual requirements and responding to trends, standards, and international practices in a timely manner.

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