Prime Minister Pham Minh Chinh has ordered the State Bank of Viet Nam (SBV) to have radical solutions to develop stable and healthy financial market. 

Prime Minister Pham Minh Chinh. Photo: VGP

The Government chief made the order during his working session with the SBV on April 17, one day after the U.S. lifted Viet Nam from its currency manipulator list.

PM Pham also urged central bank to maintain balance between the monetary market and financial market in order to ease pressure on credit institutions.

Biden administration’s move to lift Viet Nam from the list came as result of high-level diplomatic engagements and proactive efforts of several ministries and agencies, especially the SBV, said Pham.

He asked the SBV to continue close collaboration with relevant ministries and agencies in working with the American side towards harmonious and sustainable trade ties.

Speaking at the working session, Nguyen Thi Hong – the first female Governor of the central bank – said Viet Nam has consistently pursued a monetary policy in favor of inflation control and macroeconomic stabilization.

Regarding credit supply, the SBV has put in place tools to control risks and reduce short-term loans in real estate and securities markets.

The SBV has required credit organizations to focus on improving risk management capacity across all aspects of their operations in a bid to ensure safety of the banking system, Nguyen said.

However, the credit-to-GDP ratio surpassed 140 percent, said Governor Nguyen, adding that if this trend continues, pressure will increase on the banking system and macroeconic stability.

One of the biggest challenges for commercial banks is limited charter capital, making it difficult for Viet Nam to have one or two banks among the top 100 largest banks in Asia, as mapped out by the Government in its Development Strategy for Banking Sector to 2025 and orientations to 2030, according to the Governor./.