VietNamNet Bridge - The moves taken by the State Bank of Vietnam (SBV) recently, since the day the new Governor took office, show that obtaining high GDP growth rate is the top priority for the bank when regulating monetary policy.

The State Bank of Vietnam's head office in Hanoi

“We believe that the central bank prioritizes economic growth over the restructuring of banks, especially after the discouraging GDP growth rate for the first quarter and the low credit growth rate was announced,” the representative of a foreign investment fund said.

He added that the State Bank has amended legal documents in order to ease psychological pressure on banks and help ease the lending interest rates in 2016. All of these moves aim to push up lending.

Obtaining high GDP growth rate is the top priority for the bank when regulating monetary policy.

The CEO of a joint stock bank who asked to be anonymous also commented that the monetary policy regulator has driven its focus on the measures to boost GDP growth.

“The economy did not show a strong growth in the first quarter as expected, which could be a great challenge for the government to implement the plan to obtain 6.7 percent GDP growth rate this year,” he said.

The banker went on to say that the loosening of control over loans in foreign currencies and cash flow to the market will bring positive effects in the second quarter.

He noted that the newly released legal documents (Circular No 6 and No 7) would bring higher benefits to joint stock banks than state-owned banks. In exchange for high GDP, banks predicted that their CAR (capital adequacy ratio) would decrease towards the end of the year as the ‘sacrifice’.

The report of the Bank for Investment and Development of Vietnam (BIDV) released on May 31 predicted that Vietnam’s GDP growth rate would be 6-6.2 percent in the second quarter, while the figures would be 5.7-5.8 percent in the first half of the year and 6.5-6.7 percent in 2016.

BIDV’s researchers believe that the government’s strong determination to give support to businesses, the satisfactory export performance, the high registered foreign direct investment (FDI) capital and the high number of newly set up businesses all would make the high GDP growth rate attainable. 

Vietnam can also put high hopes on the recovery of the crude oil price and advantages to be brought by free trade agreements.

Regarding credit, BIDV has predicted the 10-11 percent growth rate for the third quarter of the year, while the deposit interest rate is forecast to increase slightly.

Meanwhile, Vietnam is believed to have a trade surplus value of $2 billion with $82.5 billion in export turnover and $80.5 billion in import turnover in the first half of the year.


TBKTSG