Sunday , October 2 2022

Central bank should consider raising interest rates: PM


Prime Minister Pham Minh Chinh has asked the central bank to consider lifting up policy rates in response to the U.S. Federal Reserve’s latest rate hike.

The State Bank of Vietnam (SBV) needs to ensure macroeconomic stability, control inflation and boost growth in its decision, and strive to keep loan interests stable, Chinh said in a meeting Thursday.

The PM also wants commercial banks to lower interest rates for some business sectors to support post-pandemic recovery.

The Fed on Wednesday hiked interest rates by 0.75% points for a third straight time as its authorities vowed to beat down inflation.

SBV Governor Nguyen Thi Hong said that the Vietnamese dong is among the least depreciated currencies against the U.S. dollar this year as the greenback surges over many major currencies.

But one of the biggest challenges Vietnam faces is controlling inflation, she said.

PM Chinh wants the monetary and fiscal policies to harmonize with other policies to support citizens and businesses in expanding their business and create jobs.

The Ministry of Finance needs to consider further tax breaks and reduce spending, he said.

Ensuring security in currency, credit, public debt, food, and energy is key, he added.

Truong Van Phuoc, former acting chairman of the Financial Supervision Committee under the National Assembly, said at a recent forum that Vietnam should not let the Vietnamese dong slide further as a stable currency is the final layer of defense against inflation.

The SBV maintains its goal to keep credit growth at 14% this year.

Many banks have increased their deposit interest rates in recent months to increase mobilization as their credit quotas are reached.

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