REVIEW
of
FINANCE -
Feb. 2018
37
orientation of monetary policy management.
Beside, the SBV’s announce of the amount of
foreign exchange reserves with great growing
trend also showed a strong commitment of
management agencies throughout 2017 on the
direct intervention capacity in foreign exchange
market in order to stabilize exchange rate,
contributing to eliminate the waiting psychology
for sharp increase rate, reduce foreign currency
speculation. SBV also collaborated closely with
related units to strengthen the work of inspection,
examination and handling the violations of foreign
exchange business operations and ensure that
credit institutions and economic entities strictly
following the regulations of rate and exchange
rate transaction. These fundamental changes in
exchange rate and foreign market management
have created initially the great stability. It can be
affirmed that, 2017 was considered as a successful
year of SBV in managing exchange rate and
stabilizing foreign exchange market (bring the rate
in unofficial market closely to the one in official
market). As of 31, Dec. 2017, SBV announced the
central rate of VND to USD at 22.425VND/USD,
which increased 1.2% in comparison with the one
at the end of 2016. In Bloomberg’s assessment of
the level of stability of some Asia currencies, VND
belonged to the most stable group.
In the period from 2012 to now, the
communication and transparency of the
information of SBV’s operations in particular and
the whole banking sector in general were an old
point but had significantly change (both frequency
and content) in monetary policy management.
SBV improved the mechanism to provide
information, enhance the initiation, timeliness,
transparency and accountability on the SBV’s
management mechanism, policy and decisions
and the performance of credit institutions system
through different channels.
In general, the decrease of lending interest rate
ground, particularly for the priority sector along
with the direction of credit for the Government’s
priority sector showed the results of the efforts
created by monetary policy management in the
mission to support Government to restructure
the economy. Vietnam’s economic and inflation
rate growth happenings from 2001 switched
from the position of “relatively high growth, low
outstanding balance.
In the management of OMO and refinancing,
in 2017, SBV also managed flexibly OMO
and refinancing matching the capital supply
and demand in the market, which supported
producers, enterprises and credit institutions who
were relevant to bank credit for agriculture and
rural; coordinating effectively with intervention
in the foreign exchange and gold market. Beside,
when SBV supported the Ministry of Finance to
issue successfully government bonds with long
terms and low interest rate, it manage the amount
of money supply harmoniously with fiscal policy.
For the work of exchange rate executive
management,SBVcontinuedtomanageinitiatively
exchange rate policy and lead the market in
order to implement the aim of maintaining stable
exchange rate, creating public’s confident on the
value of the domestic money. On 31, Dec. 2015,
SBV issued Decision No. 2730/QD-NHNN about
the announce of the central rate of VND to USD,
the cross rate of VND to other foreign currencies.
The central rate was determined on the basis
of the reference of the weighted average rate in
interbank foreign currency market happenings,
exchange rate in international market of some of
the currency of some countries happenings who
had trade, loan, debt and greater investment
relationship with Vietnam, macro-economic,
money balances and in line with monetary policy
objectives. The new exchange rate management
way allowed the exchange rate to change daily
flexibly according to domestic foreign money
supply and demand happenings, the fluctuation
of international market but still ensured the
management role of SBV according to the
FIGURE 2: INTEREST RATE HAPPENING IN 2012 - 2017 PERIOD
(%)
Source: National Financial Supervision Comission
