Mar 13, 2012

Vietnam - Government seeks to curb inflation without harming the economy



The Prime Minister has pledged to make the inflation target and stabilise the foreign exchange rate, while at the same time keeping the prices of goods and services at reasonable levels. 

At the regular Government meeting for the month of February the Prime Minister commented that although inflation has seen a reduction, it is still too high. In order to solve the problem he ordered the State Bank of Vietnam (SBV), the Ministry of Finance and the Ministry of Planning and Investment to work together in order to lower deposit interest rates in early March along with maintaining healthy credit growth and bank liquidity.

Upon receiving the order, the SBV decided to lower the annual ceiling deposit rate to 13%.

The inter-departmental group was also ordered to review the current financial situation of a number of firms to identify and provide support for businesses that are struggling. They have also been made responsible for mobilising and disbursing domestic and FDI funds.

According to Ministry of Planning and Investment, 8,700 new enterprises were established in the period between the beginning of the year and February 23, with total registered capital of over VND49 trillion (USD2,357 million). The figure is down 1.6% in the number of companies and 14% in registered capital compared to the same period last year.

Some of the industries given investment priority include rural development and agriculture, processing, exports and housing.

Concerning recent price hikes, the Prime Minister requested that relevant agencies balance the the market forces dictating the price of electricity and petrol with the national targets for inflation.

Nguyen Thanh Bien, the Vice Minister of Industry and Trade, said, “Our lack of natural recourses in terms of oil reserves makes it necessary to import petroleum. For this reason petrol prices are highly dependent on the international market. In the future we will have to take strict measures if we are to maintain reasonable fuel prices in Vietnam."

dtinews.vn



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