SBV Deputy Governor Nguyen Thi Hong said at a press conference in Hanoi on January 4 that the exchange rate and foreign exchange market in 2016 were quite stable despite pressure from unpredictable fluctuations in the global market.
From the outset of 2016, the SBV announced a flexible daily reference exchange rate following the developments of domestic and overseas markets and monetary policy targets, which helped limit shocks from outside, reduce the storing of foreign currencies and support the stabilisation of the exchange rate and foreign exchange market, she noted.
Deputy Director of the SBV’s Monetary Policy Department, Nguyen Duc Long said the VND/USD exchange rate rose 1.2% compared to the beginning of 2016. In some periods, it increased due to fluctuations in the global market, such as Britain’s exit from the EU (Brexit), the US presidential election and the Fed raising the interest rate, but quickly stabilised after that.
Deputy Chief Inspector of the SBV’s Inspection and Supervision Agency, Nguyen Van Hung said his agency set a target of strict monitoring in 2017 of banks with poor performance, including three banks bought by the SBV at zero cost, namely Viet Nam Construction Bank (VNCB), OceanBank and GPBank, as well as DongABank and Sacombank.
According to the SBV, in 2016, inspection of banking activities was strengthened and reformed, thus actively supporting the implementation of the monetary policy, restructuring and bad debt settlement.
Credit organisations witnessed positive changes such as growth in capital mobilisation, assets and improved financial capacity, while weak banks were strictly controlled and reshuffled.
As of November 30, 2016, bad debts were estimated at 2.46%. The Vietnam Asset Management Company (VAMC) acquired 839 debts with a total original balance of over VND23.2 trillion (US$1.1 billion) and a combined purchasing price of VND22.4 trillion (US$1.06 billion).
According to Hong, interest rates were kept stable in 2016. Some credit institutions decreased lending interest rates to support business production.
The SBV used flexible tools to regulate liquidity and keep the inter-bank interest rate at a low level, facilitating the stabilisation of market interest rates.
The State bank also directed credit organisations to take measures to balance capital, stabilise deposit interest rates, reduce costs and improve operational efficiency, she said.
She added that after increasing by 0.2-0.3% per year in the first quarter of 2016, deposit interest rates became stable from the fourth month.
From late September, some credit institutions reduced deposit interest rates by 0.2-03% and lending rates by 0.5-1% per year for business and production and prioritised fields. The current lending interest rates stand at around 6-9% per year for short-term loans and 9-11% for middle and long-term loans.
As of December 29 last year, credit growth reached 18.71%. Total payment instruments and capital mobilisation increased by 17.88% and 18.38% respectively, significantly contributing to curbing inflation at 4.74%.
In 2017, the banking sector targets a credit growth of 18% and total payment
