Experts at the seminar: Leading the way to restore economic growth.

On November 30, in Hanoi, Investment Newspaper in collaboration with the State Bank of Vietnam (SBV) held a discussion with the topic: Leading the way to recovery of economic growth.

Banks will have the hardest time after the Covid-19 crisis

According to Ms. Bui Thuy Hang, Deputy Director of the Monetary Policy Department, the State Bank of Vietnam (SBV), the banking industry has come up with seven solutions to help the economy overcome difficulties caused by the pandemic.

Specifically, proactive, flexible and synchronous management of monetary policy tools; appropriate exchange rates, interest rates and credit; urgently implementing the policy of restructuring the repayment term, exempting and reducing interest and fees, and keeping the debt group unchanged; implementing loan programs to support a number of people and businesses affected by the pandemic; and implementing solutions to exempt and reduce payment service fees.

“These results are achieved in the context that the banking system itself is also exposed to many risks from the pandemic. Enterprises face difficulties in borrowing and repaying bank loans, the risk of bad debt arising and increasing. Slow capital turnover and slow credit turnover due to business suspension, production interruption.

“As the ‘lifeblood’ of the economy, it is extremely important to ensure the safety of banking operations during and after the pandemic to be ready to help businesses and people resume production and business," Ms. Bui Thuy Hang said.

Talking about the difficulties of monetary policy, Dr. Nguyen Minh Cuong, Chief Economist of the Asian Development Bank (ADB), said that Vietnam uses monetary policy more than other countries, so fiscal policy will play a big role in the future.

Vietnam should consider accepting increased public debt and overspending, it is necessary to establish fiscal discipline in the medium and long term. ADB's recommendation is that fiscal policy will be the main pillar, alongside monetary policy support.

Economic expert Dr. Le Xuan Nghia said that in many countries around the world, in order to recover the economy, commercial banks will not be involved.

When central banks around the world are expected to raise interest rates, we will decrease, this has to be considered. Moreover, after the Covid-19 crisis, the businesses struggling the most will be commercial banks. This expert recommends that there must be solutions to not affect and distort interest rates in the market, and should not put banks in a risky position.

Recover strongly on the new path

According to experts, in the context of the pandemic, banks’ operations have suffered many consequences. That makes the management of monetary policy in the remaining months of 2021 and into 2022 face many challenges while maintaining support for the fragile economic recovery process, regardless of having to proactively deal with rising inflationary pressures.

In addition, Mr. Phan Duc Hieu, Standing Member of the Economic Committee of the 15th National Assembly, suggested that the support must be strongly screened and renewed for business areas. "The motto is not to get up on the old road, but to recover strongly on the new one," said Mr. Phan Duc Hieu.

On the side of the State Bank, the representative of this agency said the State Bank will continue to operate monetary policy proactively and flexibly, promote solutions to remove difficulties for customers affected by the pandemic, and support economic recovery. At the same time, closely monitor macroeconomic and price developments, closely coordinate with fiscal and other macro policies to control inflation according to the target set by the National Assembly.

“The Government and the Prime Minister are directing ministries and sectors to develop economic recovery and development programs, regarding the resources that are assigned to the Ministry of Planning and Investment to identify specific beneficiaries of interest support. The Ministry of Finance and the State Bank will determine resources, on the principle of ensuring macroeconomic stability and major balances," said Ms. Bui Thuy Hang.