Speaking at the conference on the implementation of tasks for the banking sector in 2024 held on the morning of January 8, Prime Minister Pham Minh Chinh said that in the face of complicated and unpredictable developments in the world situation, especially the high inflation pressure and the appreciation of key currencies, the State Bank of Vietnam has operated monetary policy proactively, flexibly, promptly and harmoniously coordinated with fiscal policy and other macroeconomic policies; contributing to advising on timely policy shifts, from "tight" to "loose and flexible".

However, besides the achieved results, monetary policy management and banking operations still have limitations and shortcomings and continue to face many difficulties and challenges.

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The Prime Minister speaks at the banking industry conference on January 8. (Photo: Chinhphu.vn)

The Prime Minister said that the banking industry needs to make more efforts to closely follow and grasp the situation, respond to policies promptly and at the right time; banking activities accept risks but need to pay more attention to risk control tools...

"Do not let the Government be passive or surprised about monetary policy, do not let money circulation be blocked, do not let people and businesses lack capital when they need support from the banking system, do not let negativity, corruption, or loopholes in the management of the banking system," the Prime Minister emphasized.

Regarding specific tasks, the Prime Minister requested the State Bank to continue closely monitoring developments and the domestic and international economic situation to have timely policy responses. Focus on proactive, flexible, timely, effective monetary policy management, closely and harmoniously coordinated with a reasonable, focused, key expansionary fiscal policy and other macro policies on the basis of a good macroeconomic foundation.

The Prime Minister welcomed the SBV's new mechanisms for credit management in 2024 when it immediately assigned a credit limit of 15% to all credit institutions from January 1; at the same time, noted flexible, timely and appropriate credit management, and monitored, strengthened inspection and supervision of credit growth.

The Prime Minister requested to continue to resolutely and effectively implement credit solutions to remove difficulties, promote production and business development, help people and businesses access credit better, more accurately and accurately, focusing on priority areas. Promote the effective implementation of preferential credit programs and policies.

One of the important tasks in 2024 of the banking industry is to continue to vigorously implement the Project "Restructuring the system of credit institutions associated with bad debt settlement in the 2021-2025 period", striving to best complete the set goals;...

Continue to promote digital transformation, innovation in banking activities, cashless payments and expand the digital ecosystem to promptly meet the needs of the economy.

Focus on reviewing and perfecting the legal framework to promote safe, healthy, smooth, and sustainable development of monetary and banking activities, meeting practical requirements and keeping up with international trends, standards, and practices.

Promote simplification, cut down on administrative procedures, decentralize and delegate power to the maximum extent so that subordinates can promptly handle the very rapid developments in banking activities.

The Prime Minister hopes that banks will continue to support businesses and people to access credit more conveniently, while ensuring system safety.

In addition, the Prime Minister also noted to avoid the situation where people go to the bank to deposit money and the bank staff introduces investment channels with higher interest rates and profits but with more risks.

Reporting at the Conference, SBV Governor Nguyen Thi Hong said that by the end of 2023, the interest rate level will decrease, bringing the interest rate level back to the pre-Covid-19 interest rate level. The SBV has continuously adjusted the operating interest rates down 4 times, with a reduction of 0.5-2.0%/year in the context of world interest rates continuing to increase and anchor at high levels, creating conditions to reduce the market lending interest rate level.

Up to now, deposit interest rates and lending interest rates of newly arising transactions of commercial banks have decreased by more than 2.5%/year compared to the end of 2022. By December 31, 2023, credit increased by 13.71% compared to the end of 2022.

VND is one of the stable currencies in the region and in the world. In 2023, VND lost about 2.9%.

Stable inflation and increasing foreign exchange reserves are factors contributing to Fitch's upgrade of Vietnam's national credit rating.