STATE BANK OF VIETNAM Primary
Objective and
Responsibility
The organization and operation of the State Bank of Vietnam (hereinafter referred
to as the SBV) are regulated in the Law on the State Bank of Vietnam, 2010.
Status and Functions of the SBV are as follows:
1. The SBV shall be a ministerial-level agency of the Government, the Central Bank
of the Socialist Republic of Vietnam.
2. The SBV shall be a legal entity, having the legal capital under the State
ownership, have head-office in Hanoi.
3. The SBV shall perform the State management function over monetary, banking
activities and foreign exchange, performs the function of the central bank as the
bank of issuing money, the bank of the credit institutions and provides monetary
services for the Government.
Policy-Making Body
The national monetary policies are monetary decisions at national level of the State
competent authorities, including decisions on objective of the currency value
stability identified by inflation target, decisions on using instruments and measures
in order to perform the set-up objectives. The Government submits annual inflation
target to the National Assembly for decision through deciding the consumer price
index and supervise implementation of the national monetary policy. The President,
on behalf of the Socialist Republic of Vietnam, performs duties and powers
regulated by the Constitution and the law in negotiating, signing, joining
international treaties in the monetary and banking field.
Release of Policy
Information
The SBV publishes the Annual Report, which reviews the activities of the Bank in
the reporting year and outlines the plan for the next year. The Report also covers
information of monetary policy management.
Changes in monetary policy stance are also conveyed to the public via press
releases, which are posted on the Bank’s website at http://www.sbv.gov.vn
MONETARY
POLICY
IMPLEMENTATION
In implementation of the resolutions and directions from the National Assembly and
the Prime Minister, the State Bank of Vietnam (SBV) conducted tight and prudent
monetary policy to curb inflation and stabilize macro-economy as well as to ensure
social security and welfares in 2011, as the followings:
1. Managing monetary policy instruments in an active and prudent manner to
support liquidity for payment activities of credit institutions as well as to stabilize
markets by: (1) Flexibly managing the monetary policy tools to control the money
supply; (2) Increasing reserve requirement ratio for foreign currency deposits of
credit institutions from 4-6-7-8% for maturities below 12 months and 2-4-5-6% for
maturities from 12 months above as well as to expand foreign currency objects;
(3) Flexibly operating the open-market operations at appropriate volume and
interest rates. Interest rates gradually increased from 10-10.5-11-12-13-14 to 15%
per annual but then reduced to 14% per annual to support liquidity and stabilize
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money markets; (4) Continuing refinancing lending to support credit to rural and
agricultural areas; providing overnight lending to ensure liquidity of the inter-bank
payment system.
2. Managing policy interest rates of SBV in accordance with market developments
and improve legal framework on interest rate management pursuant to Laws on the
SBV and Laws on Credit Institutions 2010: (1) Increasing refinancing interest rate
from 9-11-12-13-14-15% per annual, overnight lending rate from 9-11-12-13-1416% per annual, re-discount rate from 7-12-13% per annual; (2) The maximum
deposit interest rates applied for organizations and individuals at credit institutions
and foreign bank branches were as follows: (i) in VND: 6% per annual for
maturities of less than 1 months and 14% per annual for maturities of 1 months and
above; (ii) in USD: the maximum deposit rates for individual and organization were
2% and 0.5% per annual, respectively; monitoring the implementation of VND and
USD interest caps of credit institutions; customer withdrawing deposits before due
date would be applied the minimum interest rate.
3. Closely controlling credit growth below 20% and total liquidity from 15% - 16%.
Credit structure was adjusted to focus on rural and agricultural production; lending
to non-production and discouraged areas was restricted,, as followings: (1)
Requesting and closely monitoring credit institutions and foreign bank branches to
control credit growth below 20%, adjusting credit structure by increasing
investment for business - production, agriculture and rural development, export,
supporting industries, small and medium enterprises; reducing outstanding growth
rate to non-production sector to 22% by June 31, 2011 and to 16% by December 31,
2011; (2) Narrowing foreign currency lending for borrowers as residents;
promulgating the Circular on buying corporate bonds of credit institutions.
4. Managing foreign exchange markets and exchange rates consistent with the
supply and demand for foreign currencies; increasing market liquidity and
encouraging export to reduce trade deficit; improving international balance of
payments; increasing the State foreign reserves, as followings: (1) Increasing the
average inter-bank by 9.3% and narrowing trading band from + -3% to + -1% from
February 11, 2011; purchasing foreign currencies to increase foreign reserves when
the foreign exchange market experienced favorable developments, interfering at
reasonable volume into the inter-bank market through a number of large
commercial banks, selling foreign currencies to support the essential needs of the
economy such as import of petrol, oil, and electricity; (2) Expanding the object of
state enterprises eligible for selling foreign currencies to credit institutions, (3)
Providing the interest rate cap and reducing the maximum interest cap for USD
mobilization of economic entities and individuals at credit institutions to limit
foreign currency speculation; (4) Coordinating with relevant ministries, agencies
and requesting SBV’s subsidiary banks in provinces and cities as well as credit
institutions to implement measures to stabilize foreign exchange market, exchange
rates and gold market.
158 STATE BANK OF VIETNAM
5. Implementing strong measures to stabilize domestic gold price and gold market:
Issuing Circular No. 11/2011/TT-NHNN dated April 29, 2011, which regulates the
termination of gold mobilization and lending of credit institutions. Besides,
supervising and monitoring credit institutions in their implementation of the
Circular’s provisions to ensure the termination by May 1, 2012.
6. Effectively conducting information dissemination and communication about
monetary policy management and banking activities; organizing policy dialogues
between the Central Bank and commercial banks having large market shares to
timely grasp the money market developments, banking activities, difficulties of the
credit institutions in implementing the policies of the Central Bank, as well as to
propose solutions for money market stabilization and banking operational safety.
Policy Instruments
In implementation of national monetary policy, the SBV applies such instruments
as refinancing, interest rates, exchange rates, reserve requirement, open-market
operations and credit limit.
FINANCIAL
STABILITY
Authorities
Responsible for
Financial Stability
The authorities responsible for financial stability and supervision of the financial
sector in Vietnam are the SBV and the Ministry of Finance.
The SBV is responsible for financial supervision of credit institutions while the
Ministry of Finance supervises the insurance and securities companies.
Strategy for
Supervision and
Monitoring of
Financial Stability
The SBV is currently in the transitional phase from complementary to risk-based
supervision. The former approach has shortcomings and is not very appropriate
because the operations of credit institutions have become more diversified and
risky. With international support, the SBV has completed its Off-site Supervision
Renovation Project which will be implemented after due approval from the
Governor. Accordingly, the risk-based approach under CAMELS will be applied
and cover the key issues, namely (i) micro-supervision on individual credit
institutions; (ii) macro-supervision on the whole system; and, (iii) early warning
system.
Plan and To the large part, the banking system of Vietnam has applied capital adequacy ratios
Progress for the (CARs) of Basel I and gradually moving toward Basel II. Regulations on CARs of
Implementation of State Bank of Vietnam have been more consistent with those of Basel I version
Basel II 1988. However, current regulations on CARs of SBV have not taken market risks
into account as those of Basel I version 1996.
To ensure banking system development orientation toward moving close to
international practice and standards, Vietnam has submitted to the Governor the
proposal on the roadmap to implement Basel II from 2012 on for SBV and
commercial banks, as well as to approach toward full application of Basel II after
2020..
STATE BANK OF VIETNAM
159
CURRENT MONETARY
OFFICIALS
(As of 18 January 2012)
Governor
Deputy Governors
Mr. Nguyen Van Binh
Mr. Tran Minh Tuan
Mr. Dang Thanh Binh
Mr. Nguyen Dong Tien
Mr. Nguyen Toan Thang
Mr. Le Minh Hung
Address:
Tel:
Email:
Website:
State Bank of Vietnam, 49 Ly Thai To Street, Hoan Kiem District, Hanoi, Vietnam
84-4-3934 3360; Facsimile : 84-4-3825 0612;
ieod@sbv.gov.vn or dabiensbv@gmail.com
http://www.sbv.gov.vn
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