game bet88Coordination for monetary policy

game bet88 year 2024 has been viewed as a standout period in monetary policy management, despite Vietnam’s economy still grappling with an uneven recovery. game bet88 deep-reaching impact of external shocks and natural disasters - especially on exchange rates - have created a challenging environment. Looking ahead to 2025, with game bet88 economy remaining highly open and global uncertainties lingering, experts anticipate significant hurdles in managing monetary policy, particularly in areas like exchange rates and interest rates and in addressing game bet88 growing issue of bad debts.

According to game bet88 State Bank of Vietnam (SBV), through a series of coordinated solutions, credit growth across game bet88 economy had surged by around 12.5 per cent in 2024 as of December 13 compared to game bet88 end of 2023.

Notably, credit flowed strongly into key growth sectors. game bet88 manufacturing and processing sector saw credit growth of 10.52 per cent, from 6.25 per cent in 2023, mining 12.13 per cent, from an 11.77 per cent fall in 2023, construction 5.46 per cent, from 1.74 per cent, agriculture, forestry, and fisheries 4.92 per cent, from 2.72 per cent, and accommodation and food services 12.55 per cent, from 4.85 per cent.

Sustaining low interest rates

game bet88 SBV has consistently maintained its policy interest rates in game bet88 wake of Covid-19, with game bet88 global economy still facing complex geopolitical challenges, high global interest rates, a widening USD-VND interest rate gap, and increasing domestic inflationary pressure. This approach is designed to ensure that credit institutions can access funding at lower cost, helping to drive game bet88 economic recovery forward.

It has also directed credit institutions to cut operational costs to reduce lending rates, and required game bet88 public disclosure of average lending rates, interest rate spreads between deposits and loans, and information on various loan packages and credit products on game bet88 websites of credit institutions, enabling customers to make more informed borrowing decisions.

Data from game bet88 SBV indicates that interest rates continued to decline during game bet88 first ten months of 2024, following a reduction of approximately 2.5 per cent in 2023. game bet88 average lending rate for new and outstanding loans at domestic commercial banks now stands at 6.7-9 per cent per annum. game bet88 average short-term lending rate in VND for priority sectors is around 3.8 per cent per annum, which is lower than game bet88 maximum short-term lending rate of 4 per cent set by game bet88 SBV.

As of game bet88 end of game bet88 third quarter of 2024, average lending rates reported by listed banks had fallen by approximately 2.7 per cent from game bet88 peak observed in game bet88 first quarter of 2023 and by 1.9 per cent compared to game bet88 end of 2023. Specifically, lending rates at private banks saw a significant reduction of 3.25 per cent from game bet88 12 per cent peak set early in 2023, resulting in lending rates now standing at their lowest levels in many years.

Managing monetary policy to control inflation and reduce lending rates to support game bet88 domestic economy amid global economic volatility is no easy feat. Analysts believe that game bet88 challenges and pressures affecting monetary policy management will persist into game bet88 future.

Firstly, game bet88 goal of continuing to cut interest rates will be difficult, as rates have already fallen significantly. Exchange rates saw multiple fluctuations last year as international USD interest rates remained elevated for longer than expected.

Secondly, while credit expansion has occurred, it has not been properly directed towards productive sectors, instead flowing into riskier areas, most notably real estate. Credit is concentrated in game bet88 supply side of game bet88 market, with loans going to developers and real estate investment companies. However, despite a downwards trend in lending rates, people are hesitant to borrow for property purchases due to ongoing market instability.

Thirdly, there is still significant pressure on game bet88 banking system to supply capital, including medium and long-term funds, as raising capital through game bet88 corporate bond and securities markets remains challenging. game bet88 pressure from bank deposits continues, with individuals seeking other attractive investment opportunities due to low deposit interest rates.

Lastly, there is game bet88 increasing burden of bad debts. As of game bet88 end of game bet88 third quarter of this year, game bet88 non-performing loan (NPL) ratio stood at 4.55 per cent of total outstanding loans; almost identical to game bet88 end of 2023 and up from 2 per cent in 2022. At game bet88 same time, game bet88 banking sector’s provision buffer has continued to shrink, with game bet88 average bad debt coverage ratio falling to its lowest point in game bet88 past five years.

Monetary policy management dilemma

Dr. Le Xuan Nghia, Member of game bet88 National Financial and Monetary Policy Advisory Council, identified a major challenge for monetary policy management in game bet88 near future. He expressed concern about game bet88 rising value of game bet88 USD, as Vietnam cannot devalue game bet88 VND in line with game bet88 USD to avoid being classified by game bet88 US as a currency manipulator. This creates a difficult situation for game bet88 central bank going forward.

According to Dr. Nghia, US President Donald Trump aimed to keep interest rates low in his first term to benefit businesses but did not want to devalue game bet88 USD. Since most countries hold their foreign reserves in USD, a stronger dollar forces them to continue using it as their reserve currency. Essentially, President Trump’s strategy was to enhance game bet88 economic power of game bet88 US.

Vietnam has now exceeded two of game bet88 three criteria used by game bet88 US to assess currency manipulation by major trading partners. These include a bilateral trade surplus with game bet88 US of 1.7 billion in game bet88 past four quarters (surpassing game bet88 billion threshold) and a current account surplus of 5 per cent of GDP (above game bet88 3 per cent threshold).

Experts predict that 2025 will present ongoing challenges, with game bet88 global economy still facing considerable uncertainties and risks. Although global inflation has eased, it remains unstable, putting additional pressure on monetary policy, especially considering game bet88 open nature of Vietnam’s economy. Prices of global commodities are expected to remain volatile due to complex geopolitical developments, increasing concerns over food security, natural disasters, and extreme weather patterns.

Domestically, Vietnam’s economy continues to grapple with significant obstacles, including inherent challenges such as issues in game bet88 real estate market and unresolved corporate bond problems. game bet88 economy’s ability to absorb credit remains weak, as many businesses are reducing operations, halting production, or closing due to financial struggles, especially after game bet88 impact of Covid-19.

Given these difficulties, international organizations agree that there is limited space for any further easing of Vietnam’s monetary policy. With both global and domestic uncertainties, game bet88 SBV acknowledges that while game bet88 successful management of monetary policy has helped stabilize inflation expectations, game bet88 risks of inflation in 2025 should not be underestimated.

To achieve game bet88 socio-economic development targets for 2025 set by game bet88 National Assembly and game bet88 government, game bet88 SBV stresses game bet88 importance of close coordination between monetary policy, fiscal policy, and other macro-economic strategies. This approach aims to ensure sustainable economic development, balance macro-economic goals, maintain game bet88 stability of game bet88 economy, and control inflation.

game bet88 SBV will continue to employ flexible monetary policy tools, closely monitoring macro-economic trends and stabilizing game bet88 money market while being prepared to support liquidity for game bet88 credit institution system. It will also adjust interest rates and exchange rates to align with macro-economic balances, inflation, and game bet88 goals of monetary policy.

Moreover, it will continue implementing credit policies in line with macro-economic developments and inflation, addressing game bet88 capital needs of game bet88 economy. It has instructed credit institutions to focus on safe, effective credit growth, directing funds towards production, business, and priority sectors. Specialized credit programs will be implemented in certain industries and sectors, following game bet88 government’s directives. Additionally, it will maintain strict control over credit to high-risk areas while ensuring that individuals and businesses can access lending.