State Bank: 'Flexible exchange rate management contributes to absorbing external shocks'

Regarding exchange rates, Vietnam is under great pressure due to the openness of the economy, along with factors such as economic policies of major countries and import-export situations.

Ngân hàng Nhà nước: 'Điều hành tỉ giá linh hoạt, góp phần hấp thu các cú sốc bên ngoài' - Ảnh 1. — Deputy Governor Dao Minh Tu informed about the exchange rate and interest rate situation... on the afternoon of January 7 - Photo: State Bank

Exchange rate under great pressure due to the openness of the economy

The State Bank said that in 2024, the world economy will grow slowly and unevenly, inflation in countries will cool down more clearly after a period of monetary tightening and falling oil prices. In addition, central banks will lower interest rates, and commodity and currency markets will fluctuate strongly due to the uncertainty of the global economy.

The domestic economy has grown positively, inflation has been controlled in line with the set target. Compared to other countries in the world, Vietnam is a bright spot in controlling inflation, stabilizing the macro economy, contributing to attracting FDI capital.

Regarding exchange rates, Vietnam is under great pressure due to the openness of the economy, along with factors such as economic policies of major countries, fluctuations in the USD, geopolitical fluctuations and import-export situations.

"During the year, the USD exchange rate increased by more than 7% at times. At the end of the year, the exchange rate increased by about 5.03%, which we consider to be a reasonable level, ensuring that businesses and investors do not worry, have a speculative mentality and hoard USD," said the deputy governor.

Deputy Governor Dao Minh Tu emphasized that the State Bank will operate exchange rates flexibly and appropriately, contributing to absorbing external shocks. At the same time, it will synchronously coordinate monetary policy tools.

Thanks to that, the foreign exchange market remains stable, foreign exchange liquidity is smooth, the economy's foreign exchange needs are fully met; exchange rates move flexibly in both directions of increase/decrease, in accordance with market conditions.

Small banks' interest rate hikes do not affect policy operations

In interest rate management, the State Bank continues to maintain operating interest rates in the context of world interest rates remaining high, creating conditions for banks to access capital from the State Bank at low costs, thereby creating conditions to support the economy.

Regarding the phenomenon of some small commercial banks increasing deposit interest rates to ensure liquidity, Mr. Tu said the increase was small and did not affect the State Bank's policy management.

Regarding the gold market, according to Mr. Dao Xuan Tuan - Director of the Foreign Exchange Management Department, State Bank, in managing gold trading activities, with the attention and direction of the Government, synchronous solutions of the State Bank and coordination of relevant ministries and branches, up to now, the initial basic goal of handling and controlling the price difference between SJC gold bars and world gold prices within a suitable range has been achieved.

Regarding credit, the State Bank leader informed that credit has increased by 15.08% compared to the end of 2023, thereby adding more than 2.1 million billion VND to the economy.