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PM orders flexible economic management after Fed's rate hike

VGP - Prime Minister Pham Minh Chinh stressed the flexibility in directing and operating the economy following the Federal Reserve System (Fed)’s latest interest rate increase.

September 23, 2022 7:28 PM GMT+7
PM orders flexible economic management after Fed's rate hike - Ảnh 1.

Illustration photo

The Government chief made the remark at the Government's thematic meeting on law-making in September 2022. 

He noted that the Covid-19 epidemic has forced countries to loosen their monetary and fiscal policies and domino effects came up, such as high inflation and central banks raising interest rates, notably the US Federal Reserve (Fed) increasing interest rates by 0.75 percentage points for the third time this year on September 20-21.

Besides, Viet Nam's major export markets like the U.S., the EU, and China, tend to shrink, he stressed.

Altogether they have negatively affected the exchange rate, interest rate, credit growth, currency value, and foreign exchange regulation fund of Viet Nam, the PM said.

He pointed to the need to continue the goal of maintaining macroeconomic stability, controlling inflation, promoting growth and ensuring major balances of the economy to deal with those challenges.

The Government chief instructed ministries, branches and localities to strictly implement Directive 15/CT-TTg of the Prime Minister, dated September 16, 2022 on measures to maintain macro-economic stability, control inflation, promote growth, and ensure major balances of the economy in the current context while the monetary policy is prudent, ensuring initiative, flexibility and efficiency.

The State Bank was tasked to allocate credit capital reasonably, focusing on production and business, priority areas, reducing loan procedures while the Ministry of Planning and Investment is responsible for promoting the attraction of high-quality investment, focusing on speeding up the disbursement of public investment capital, and the implementation of the Socio-economic recovery and development program, and the three national target programs.

The Ministry of Agriculture and Rural Development was assigned to promote the development of agriculture, industry and services to create a material foundation for macroeconomic stability, he said.

SBV to keep close watch on Fed moves: Governor

The same day, SBV Governor Nguyen Thi Hong said that the State Bank of Viet Nam will persist in monetary policy management solutions towards macroeconomic stability, but closely follow all developments to manage the situation in an appropriate manner.

The Vietnamese currency is still among the least depreciated in the world, Ms. Nguyen stated.

Viet Nam will be able to curb inflation below 4 percent as the target set by the National Assembly, said Governor Nguyen, adding that the central bank will continue to control the exchange rate, and intervene in the foreign currency market to limit fluctuations to help stabilize the foreign currency market./.