SBV: settling weak banks the main focus in the next five years

22-Dec-2016 Intellasia | Vietnam Finance | 6:00 AM Print This Post

At the headquarter on 49 Ly Thai To, Hanoi, the State Bank of Vietnam (SBV) has recently held a end of the year meeting with representatives of international financial and monetary organisations, embassies, and foreign banks in Vietnam, and foreign experts having working relations with SBV.

Speaking at the meeting, SBV’s Governor Le Minh Hung said that the significant achievements of Vietnam in the context when the government cabinet has only gone into operation for half a year showed very positive signs for the market and market members, including foreign banks and development partners in Vietnam.

Governor Hung, revealed that SBV has completed the restructuring plans in the next five-year period and the agency will start implementing these plans from the beginning of next year after receiving approval from the government.

According to SBV’s Governor, settling bad debts and handling the remaining weak banks are two of the main focuses of the restructuring of banking system in the next five-year period. In addition, the agency will make proposal to adjust the Law on Credit Institutions, in which SBV expects to bring in more international standards in order to meet the international requirements for the development framework of the banking system.

At the same time, SBV pledged to continue making efforts to contribute to the process of stabilising the macro economy and support reasonable economic growth. Governor Hung expressed the expectation that international financial and monetary organisations, embassies, foreign banks in Vietnam, and foreign experts will play a greater role in the Vietnam’s transformation and reform. SBV believed that the positive contribution of these units will bring benefit to all of the parties.

Meanwhile, in his speech, Pham Hong Hai, general director of HSBC and representative of the Bank Working Group (BWG), has highlighted the success of SBV in 2016 – a year in which the global economy encountered numerous turmoils such as the strong depreciation of the Chinese yuan in the beginning of the year, the exit of the United Kingdom from the European Union, or the US presidential election.

Hai analysed that despite these external volatility, SBV has managed and administered the foreign exchange market in an active and effective way. The agency has made the right move when changing the exchange rate management mechanism from early 2016 in order to allow more flexible movements of the foreign currency market with better matching supply and demand. This has helped avoid the exchange rate shocks to the system. The interest rate level has been stable and gradually decreasing, facilitating firms to lower borrowing costs and supporting healthy economic growth. Furthermore, the cautious money supply management of SBV has also supported the economic growth and curbed inflation. The macroeconomic stability has also played an important role in helping Vietnam further attract Foreign Direct Investment (FDI) inflows in 2016.


Category: Finance, Vietnam

Print This Post

Comments are closed.