Nevertheless, the two most important agencies in charge of regulating and supervising monetary policies prove to be contradictory with each other.
Whom to believe?
Le Duc Thuy, Chair of the National Finance Supervision Council told the press that in the first 15 days of October, the Vietnam dong deposits at banks were reduced by 45 trillion dong ($2 billion) in comparison with late September.
Also according to Thuy, the deposits in foreign currencies have been increasing. By late September 2010, the foreign currency deposit balance had been 40 trillion dong lower than the foreign currency outstanding loans. Meanwhile, the gap between the deposit balance and outstanding loans in foreign currencies had reduced to 20 trillion dong by early October, which meant that the foreign currency deposits had increased by 20 trillion dong. The figure has been explained by the fact that people have withdrawn Vietnam dong to purchase foreign currencies or gold.
However, after that, the State Bank of Vietnam affirmed that some newspapers reported wrong information about the Vietnam dong deposit balance, saying that in fact, the Vietnam dong deposit balance at the banking system has been increasing.
Regarding the interest rates, Thuy has said that the Government does not strive to slash interest rates at any cost and that it allows commercial banks to set up the deposit and lending interest rates in accordance with the market supply and demand.
This has caused conflicting information about the intervention by the State Bank of Vietnam in the implementation of the new interest rates.
After that, an official from the State Bank said that easing interest rates is the decision of VNBA’s members, and that the management agency does not intervene with their decision.
However, people still have doubts about the intervention of the management agencies in banks’ operation. Two weeks ago, commercial banks were put under pressure to push their interest rates down, though the inflation rate in the first nine months of the year was relatively high.
Macroeconomic stability – the top priority task
Thuy has admitted that the consumer price index (CPI) has been increasing and causing concerns. Macroeconomic stability should be seen as the top priority task, and curbing inflation is the most important goal.
In fact, right at the beginning of October, economists issued warnings about the possible high inflation rates. Vo Tri Thanh, Deputy Head of the Central Institute for Economic Management stressed that it was necessary to continue to tighten monetary policies in order to curb inflation. “Everything is very clear: the macroeconomic stability must be the top priority,” he said