Inflation pressure is only moderate, monetary policy does not need to be changed

VCN - Dr. Nguyen Duc Do, Deputy Director of the Institute of Economics - Finance, Academy of Finance, gave an interview to Customs Magazine.
Heavy Inflation pressure in 2022 Heavy Inflation pressure in 2022
Inflation pressure is only moderate, monetary policy does not need to be changed
Dr. Nguyen Duc Do Deputy Director of the Institute of Economics - Finance, Academy of Finance,

What pressure do you think monetary policy in Vietnam will be under when many countries around the world have implemented monetary tightening?

Many current comments say that operating interest rates are under pressure and may be adjusted by the State Bank this year. In my opinion, the operating interest rate is not affected much. The key lies in the interbank market to keep liquidity and regulate the money supply at banks. Of course, the fact that many countries, including the US, have increased interest rates and tightened monetary policy to curb inflation, which has a certain influence on our country, especially on the exchange rate. However, in the past few days, the State Bank has properly siphoned VND through the T-bill channel, reducing pressure on VND. This shows that the State Bank is still operating monetary policy to support the economy's recovery and growth.

Could you tell me, how will domestic inflation affect the management of monetary policy?

The inflation index in the first half of 2022 in Vietnam was at a low level, 1.25%, far from the Government and National Assembly's target of operating 4% inflation in 2022. Moreover, inflation increased mainly due to the rapid recovery of the economy and the return of service - tourism industry, plus high prices of raw materials and petrol. Therefore, inflation pressure in our country is only moderate, there is still room to support economic growth and recovery.

For the second half of 2022, currently gasoline price rises seem to have slowed, decreasing by 10-15% compared to the beginning of the year. The price of raw materials for some products is also decreasing. If the panmic is basically controlled the pressure on inflation in our country will gradually decrease. Previously, there were also many concerns about import inflation, but it is clear that domestic commodity prices only increased by 2% and production input prices also increased slightly, so this is not a problem.

Regarding monetary policy, according to the State Bank, deposit interest rates in the first half of the year only increased by 0.09% - a very low increase. If inflation goes up, the SBV can control it through stabilizing the foreign currency exchange rate. Therefore, I think that the SBV's operating interest rate does not need to increase this year; if it does, it should be in 2023.

Does monetary policy in the remaining six months of 2022 need to change?

In my opinion, the current monetary policy management of the State Bank does not need to change much. The State Bank should continue to operate flexibly and proactively in response to developments in the international financial situation.

Monetary policy is currently making important contributions to economic support, helping businesses recover through credit capital flows. Businesses still want banks to reduce lending interest rates, so the implementation of the 2% interest rate support program from the state budget can help reduce lending interest rates and businesses can access cheap capital. As a result, credit growth this year may be at 14-15%, depending on the extension of credit growth limit (room) for banks from the State Bank.

Thank you Sir!

By Huong Diu/Quynh Lan

Related News

With the recovery momentum returning, businesses need to speed up credit

With the recovery momentum returning, businesses need to speed up credit

VCN - In recent instructions, the monetary policy regulator continues to urge banks to implement practical and effective solutions to strive for system-wide credit growth, which will be 5-6% by the end of the second quarter of 2024.
Thanks to timely intervention, the domestic exchange rate has enough room for flexible developments

Thanks to timely intervention, the domestic exchange rate has enough room for flexible developments

VCN - Unlike 2022 and 2023, the exchange rate has been hot since the beginning of 2024. Right after the early- months, the exchange rate has increased by 4.6%, a 3.4 % increase compared to the devaluation of the whole year 2022.
Positive economic transformations in four months

Positive economic transformations in four months

VCN - In the context of global difficulties and challenges, Vietnam's socio-economic situation in April continues to undergo quite positive transformations, contributing to improving the overall results of the first four months of the year and setting the pace for the following months.
To maintain its billion-dollar export position, forestry and fisheries enterprises propose additional credit limits

To maintain its billion-dollar export position, forestry and fisheries enterprises propose additional credit limits

VCN - Implementing a preferential credit program for the forestry and fisheries sectors is considered one of the practical and effective solutions for these two industries to continue their billion-dollar export target.

Latest News

New opportunities for Vietnam-Russia trade

New opportunities for Vietnam-Russia trade

The upcoming official visit to Vietnam by Russian President Vladimir Vladimirovich Putin is expected to open up new opportunities in bilateral relations, aiming towards the prosperous development for both sides.
MoIT launches anti-dumping probe into galvanised steel originating from China, RoK

MoIT launches anti-dumping probe into galvanised steel originating from China, RoK

The Ministry of Industry and Trade (MoIT) has requested an investigation and application of anti-dumping measures against some galvanised steel products originated from China and the Republic of Korea (RoK).
Greenovation forum for businesses to be held later this month

Greenovation forum for businesses to be held later this month

Given the rising demand for sustainable development and the associated business opportunities, the Vietnam Independent Directors Association (VNIDA) will host a forum for companies to demonstrate their commitment to both economic interests and environmental responsibility in Ho Chi Minh City on June 26.
Quang Ninh aims to attract 3 billion USD worth of FDI this year

Quang Ninh aims to attract 3 billion USD worth of FDI this year

Northern Quang Ninh province has attracted more than 1.52 billion USD worth of foreign direct investment (FDI) in the first half of this year and is poised to reach its goal of 3 billion USD in FDI for the full year.

More News

Import-export businesses reduce costs thanks to the customs clearance location at Thanh Phuoc Port

Import-export businesses reduce costs thanks to the customs clearance location at Thanh Phuoc Port

VCN - As the first dry port of Binh Duong province to be announced, Thanh Phuoc Port has just been recognized by the Ministry of Finance as a Customs Clearance Site, which is expected to promote the transportation of goods by waterway, to save logistics costs for businesses.
Cashew exports are struggling because of being on passive in raw material sources

Cashew exports are struggling because of being on passive in raw material sources

VCN - For each container of exported cashew kernels, enterprises lose hundreds of millions of dong when they have to import raw materials at high prices, while export prices are not adjusted to increase accordingly.
Quang Ninh strives to become northern region’s marine aquaculture hub

Quang Ninh strives to become northern region’s marine aquaculture hub

The northeastern province of Quang Ninh aims to become a fisheries hub in the northern region by 2030.
Bac Giang lychees promoted in Thailand

Bac Giang lychees promoted in Thailand

Fresh lychees from Luc Ngan district, the northern province of Bac Giang, continue to be sold at the supermarket chain of Gourmet Market and shopping malls belonging to Thailand’s The Mall Group this year.
Quảng Ninh posts fourth fastest growth in Red River Delta

Quảng Ninh posts fourth fastest growth in Red River Delta

The gross regional domestic product (GRDP) in the northern province of Quảng Ninh expanded at an estimated 9.02% year on year during the first half of 2024, ranking fourth in the Red River Delta and eighth nationwide.
New decree to set stage for innovative start-up economy

New decree to set stage for innovative start-up economy

The development of a separate decree on innovation and innovative start-ups is underway with an aim to leverage innovative start-up firms to a new height.
Early US recognition of market economy to increase opportunities for Vietnamese exports

Early US recognition of market economy to increase opportunities for Vietnamese exports

The US's recognition of the market economy in Vietnam will help expand business opportunities for Vietnamese enterprises and pave the way for Vietnamese exports to this market, according to experts.
Industrial production grew on a large scale

Industrial production grew on a large scale

VCN - 55 localities had an increase in the index of industrial production (IIP) compared to the same period last year, only 8 localities had a decrease in IIP compared to the same period last year.
More export opportunities from the Chinese market

More export opportunities from the Chinese market

VCN – Besides 12 fruit and vegetable items; bird's nest, fish meal and some products for the production and processing of animal feed, dairy and seafood products that have been officially exported to China, fresh coconuts, frozen durian, crocodiles, poultry... are expected be officially exported to the Chinese market in the near future.
Read More

Your care

Latest Most read
New opportunities for Vietnam-Russia trade

New opportunities for Vietnam-Russia trade

The upcoming official visit to Vietnam by Russian President Vladimir Vladimirovich Putin is expected to open up new opportunities in bilateral relations, aiming towards the prosperous development for both sides.
MoIT launches anti-dumping probe into galvanised steel originating from China, RoK

MoIT launches anti-dumping probe into galvanised steel originating from China, RoK

The Ministry of Industry and Trade (MoIT) has requested an investigation and application of anti-dumping measures against some galvanised steel products originated from China and the Republic of Korea (RoK).
Greenovation forum for businesses to be held later this month

Greenovation forum for businesses to be held later this month

Given the rising demand for sustainable development and the associated business opportunities, the Vietnam Independent Directors Association (VNIDA) will host a forum for companies to demonstrate their commitment to both economic interests and environmental responsibility in Ho Chi Minh City on June 26.
Quang Ninh aims to attract 3 billion USD worth of FDI this year

Quang Ninh aims to attract 3 billion USD worth of FDI this year

Northern Quang Ninh province has attracted more than 1.52 billion USD worth of foreign direct investment (FDI) in the first half of this year and is poised to reach its goal of 3 billion USD in FDI for the full year.
Import-export businesses reduce costs thanks to the customs clearance location at Thanh Phuoc Port

Import-export businesses reduce costs thanks to the customs clearance location at Thanh Phuoc Port

VCN - According to Director of Binh Duong Customs Department Nguyen Tran Hieu, currently, the majority of import and export goods of businesses in the area are transported by sea.
Mobile Version