Vietnam central bank to keep ‘open’ policy to support economic growth: official

By Quang Minh
Fri, October 18, 2024 | 4:09 pm GMT+7

The Vietnamese central bank will conduct an “open” monetary policy in a way that supports the local economy with more capital, said its Deputy Governor Dao Minh Tu, as there is large room for further cash injections toward the year-end.

“The State Bank of Vietnam (SBV) will continue to provide funds and secure liquidity for local banks,” Tu told a press meeting on Thursday.

“In case macroeconomic conditions are conducive to economic growth, with inflation and the USD/VND exchange rate under control, we will leave doors open to interest rate management in the coming time,” he added, without specifying a clear direction.

State Bank of Vietnam Deputy Governor Dao Minh Tu (second, left) speaks at a press meeting in Hanoi, October 17, 2024. Photo courtesy of SBV.

State Bank of Vietnam Deputy Governor Dao Minh Tu (second, left) speaks at a press meeting in Hanoi, October 17, 2024. Photo courtesy of SBV.

After the U.S. Federal Reserve (Fed) cut its benchmark interest rates last month after more than four years, the SBV stepped up cash injections after lowering its interest rate on open market operations (OMO) to 4% per annum from 4.25%.

In the coming months, the SBV will continue to manage interest rates in line with market movements, macroeconomic conditions, inflation, and monetary policy goals, Tu said.

The banking regulator will manage the forex rate in a flexible manner, in alignment with other monetary tools to keep the forex market stable and contribute to inflation control and macro stability, he stated.

Tu informed that credit growth had reached 9% in the first three quarters of this year, leaving a spare space of six-percentage point expansion in the last three months, given a target of 15% lending growth for the whole of 2024.

The SBV will strive to funnel lending into prioritized fields and growth drivers determined by the government, limiting loans to high-risk areas.

“Lending activities will focus on key projects, BOT (build-operate-transfer) projects, and credit packages for select sectors,” Tu added.

He went on to say that the SBV will aggressively direct banks to implement the VND120-trillion ($4.76 billion) low-cost loan package for affordable and social housing development, the VND30-trillion lending program for the forestry and fishery industries, and other aid programs for clients that were hit by typhoon Yagi.

In its latest macro update on Vietnam, HSBC projected Vietnam to grow 7% in 2024 and 6.5% in 2025, the highest rates among ASEAN-6.

With this projection and lingering inflation, HSBC does not expect the SBV to cut interest rates until the end of next year. “We think 4.5% is roughly the [policy] rate we're comfortable with here in Vietnam,” said HSBC chief Asia economist Frederic Neumann in Hanoi earlier this week.

Ngo Dang Khoa, head of markets and securities services at HSBC Vietnam, told The Investor that he expected the SBV to keep an "accommodative" monetary policy to support economic growth.

Meanwhile, researchers with Singapore-based UOB last week said the risks of the SBV shifting towards easing its policy have certainly been more considerable than before, given inflation showing signs of easing, USD strength expected to wane further on the back of the U.S. Fed easing policy, and with adverse effects spreading in the aftermath of typhoon Yagi.

They anticipated the SBV to maintain its refinancing rate at the current 4.5% while focusing on facilitating loan growth and other support measures.

Comments (0)
  • Read More
Bourse status upgrade prospect to draw back foreign investors: expert

Bourse status upgrade prospect to draw back foreign investors: expert

While there are still many favorable factors for Vietnam's stock market, the potential for a market status upgrade is expected to help attract foreign capital back in the near future, said Ho Thuy Ai, deputy CEO of Phu Hung Fund Management JSC.

Finance - Wed, December 4, 2024 | 9:13 am GMT+7

Malaysia a rising star in ASEAN's clean energy transition

Malaysia a rising star in ASEAN's clean energy transition

Malaysia is on track to increase its renewable energy capacity to 31% of the national energy mix by 2025, reflecting its determination to become a leading force in the region’s green transition.

Southeast Asia - Wed, December 4, 2024 | 8:50 am GMT+7

Vietnam delivery major Viettel Post to launch two-way cross-border e-commerce platform

Vietnam delivery major Viettel Post to launch two-way cross-border e-commerce platform

Viettel Post, a subsidiary of tech giant Viettel, is set to launch Vietnam's first two-way cross-border wholesale e-commerce platform, VIPO Mall, according to the company.

Companies - Wed, December 4, 2024 | 8:47 am GMT+7

Eleven-month seafood export almost reaches $9.2 bln

Eleven-month seafood export almost reaches $9.2 bln

Vietnam's seafood industry is riding a wave of success, with November exports reeling in an impressive $924 million, a 17% annual increase, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Southeast Asia - Wed, December 4, 2024 | 8:10 am GMT+7

Vietnam should develop clear legal framework for digital assets: exec

Vietnam should develop clear legal framework for digital assets: exec

The Vietnamese government should develop a clear and transparent legal framework for the development of digital assets, paving the way for the country to become a regional hub in this field, an executive suggested.

Finance - Wed, December 4, 2024 | 8:00 am GMT+7

Indonesia aims for 32 mln tons of rice in 2025

Indonesia aims for 32 mln tons of rice in 2025

Indonesia’s rice production is projected to reach 32 million tons in 2025, marking a 3% increase over the estimated 31 million tons for this year, according to the country's Coordinating Minister for Food Affairs Zulkifli Hasan.

Southeast Asia - Wed, December 4, 2024 | 7:00 am GMT+7

Keppel eyes to expand investment in Vietnam's renewable energy, database sectors

Keppel eyes to expand investment in Vietnam's renewable energy, database sectors

Keppel, one of the largest real estate developers in Vietnam, wants to enlarge its investment in sustainable development areas like renewable energy and databases.

Industries - Tue, December 3, 2024 | 9:07 pm GMT+7

Vietnam to deploy offshore wind power project for export to Singapore from 2030

Vietnam to deploy offshore wind power project for export to Singapore from 2030

Vietnam and Singapore aim to partly deploy an offshore wind power project, that will export electricity from the former to the latter, from 2030, top officials agreed.

Energy - Tue, December 3, 2024 | 7:44 pm GMT+7

Vietnam pharma firm Bidiphar to sell 23.3 mln shares to build new factories 

Vietnam pharma firm Bidiphar to sell 23.3 mln shares to build new factories 

Vietnam pharma major Binh Dinh Pharmaceutical Medical Equipment JSC (Bidiphar) plans to offer approximately 23.3 million shares to strategic investors via private placements to finance the construction of two new factories.

Companies - Tue, December 3, 2024 | 4:55 pm GMT+7

Floods cause $580 mln loss to Thai rubber plantations

Floods cause $580 mln loss to Thai rubber plantations

The massive floods that hit five southern provinces in Thailand last week may cause damage worth THB20 billion ($580 million), according to the Rubber Authority of Thailand (RAT).

Southeast Asia - Tue, December 3, 2024 | 3:56 pm GMT+7

High-quality corporate reporting remains key priority for Malaysian economy

High-quality corporate reporting remains key priority for Malaysian economy

High-quality corporate reporting plays an important role in the Malaysian economy, helping the country expand its economic pie, foster broader participation and increase the complexity of its economy.

Southeast Asia - Tue, December 3, 2024 | 3:49 pm GMT+7

Japan’s Marubeni to invest $100 mln more in Vietnam subsidiary, transfer equity afterward

Japan’s Marubeni to invest $100 mln more in Vietnam subsidiary, transfer equity afterward

Japan’s Marubeni Corporation will increase its investment in Vietnam subsidiary Kraft of Asia Paperboard & Packaging (KOA) and then transfer its whole equity in the firm to Meico Management Co., Ltd.

Industries - Tue, December 3, 2024 | 3:10 pm GMT+7

Death sentence upheld for Van Thinh Phat chairwoman Truong My Lan

Death sentence upheld for Van Thinh Phat chairwoman Truong My Lan

The High People’s Court in Ho Chi Minh City on Tuesday upheld the death sentence for Truong My Lan, chairwoman of Van Thinh Phat Group, in an appeal trial that lasted for nearly a month.

Society - Tue, December 3, 2024 | 2:36 pm GMT+7

Thai giant SCG to invite global tech giants to jointly invest in Vietnam petrochemicals complex: exec

Thai giant SCG to invite global tech giants to jointly invest in Vietnam petrochemicals complex: exec

Thailand-based conglomerate SCG, a leading industry group in ASEAN, will seek leading global tech partners to jointly invest in its $5.2 billion Long Son Petrochemicals Complex (LSP) in Vietnam, says its president and CEO Thammasak Sethaudom.

Industries - Tue, December 3, 2024 | 12:01 pm GMT+7

HCMC financial center must take shape in early 2025: Prime Minister

HCMC financial center must take shape in early 2025: Prime Minister

Ho Chi Minh City needs to take urgent steps to have its international financial center basically formed by the first quarter of 2025, says Prime Minister Pham Minh Chinh.

Economy - Tue, December 3, 2024 | 11:30 am GMT+7

Post-tax profit of Samsung’s 4 major factories in Vietnam drops 23.6% in Jan-Sept

Post-tax profit of Samsung’s 4 major factories in Vietnam drops 23.6% in Jan-Sept

Four Vietnamese subsidiaries of South Korean giant Samsung Electronics reported combined profits after tax of KRW4,181 billion ($2.98 billion) in the first nine months of this year, down 23.6% year-on-year.

Companies - Tue, December 3, 2024 | 10:14 am GMT+7