P o li c y

n et a ry
Mo Le T hi L a n Anh
3:
Group n hH u ye n
ha
Trinh T
u c C uon g
nD
Ng u ye
T h iH uong
n
Nguye
Content
1. Reserves
Requirements
Reserve requirements are instrument used by
central bank to manage the availability of credit.
Therefore, reserve requirements will affect the
amount of credit that firm in economy can receive.

All Vietnamese commercial banks and credit

institutions are required to maintain a level of
“Compulsory minimum reserves" based on a
percentage of the capital mobilization.
1. Reserves
Requirements
"The reserve requirement" exists in three
forms:

2. Cash on hand

3. Deposit required at the central bank

4. Bond reserves
1. Reserves
Requirements
 Effects on economy:
 Required reserves increase -> capital loans of
commercial banks go down -> reduced
currency bloc.
 Required reserves decrease -> capital loans of
commercial banks go up -> rose currency
bloc.
1. Reserves
Requirements
Under Decision No 74/QĐ-NHNN 18/1/2010 and
Decision No 379/QĐ-NHNN 24/2/2009 ,
taking effect from 01/02/2010, Vietnamese
reserve requirements are:
1. Reserves
Requirements
2. Interest Rate

Interest rate is the main tool to regulate

indirectly between demand and supply of
credit.

 

2. Interest Rate

Basic principles in using the interest rate tool



are:

1. Real interest rates cannot be higher than the

average profit rate of the economy.

2. The average lending interest rate must be

higher than the average deposit rate.

3. Long-term interest rates must be higher than

short-term interest rates.
2. Interest Rate
 For credit interest rate:
Fixed interest rates: Fixing the maximum interest
rates for deposits and the minimum interest rate
for loans.
Floating interest rate: Central bank indirectly
impacts interest rates on deposits and loans of
commercial banks using the discount rate to
regulate supply and demand for credit and
monetary amount of the economy.
 3. Rediscount
Commercial banks
Money supply

SBV Financing Commercial banks

Commercial banks
 4. Open Market
Commercial bank
reserves
reserves
Sell Gvnt bonds

SBV Commercial bank

Buy gvnt bonds

Commercial bank
 5.Line of credit
Line of credit Commercial bank Credit
Credeit

SBV Line of credit Commercial bank

Line of credit
Commercial bank
 7. Exchange rate adjustment

Ø Necessity: the real exchange rate volatility in the market

with large amplitude which are detrimental to the
situation of production and life, damage to the field of
foreign trade, credit and international payment

Ø Method of adjusting the exchange rate:

Changes in interest rates
Foreign exchange intervention
Revaluation or devaluation of domestic currency
7. Inspection and control
activities of the banking system
in the country

 The inspection of the banking system to control the state

to direct the operation of that system under the legal
framework according to the instructions and guidance
of the state bank, become an indispensable measure to
achieve the objective of monetary policy

8. Intervention into Gold market
and foreign currency market
 When the price of gold and foreign currency fluctuations
in the market is large, the state bank to intervene
directly and promptly:
When prices rise too high foreign currency: The state
bank intervened by selling out, when the price falls too
low, the bank purchased
The intervention in the gold price as the import of
gold ...
 The end

 Thank you for your

Attention!