Vietnam says it will stick to monetary policy that supports economic growth


HANOI, July 19 (Reuters) – Vietnam will stick to a monetary policy “supporting economic growth” while closely monitoring inflation, the country’s central bank said on Tuesday.

The Southeast Asian country’s second-quarter gross domestic product (GDP) growth accelerated to 7.72% from a 5.05% expansion in the first quarter, but authorities warned against challenges such as rising inflation in the second half. Read more

“If inflation remains under control, monetary policy will continue to be implemented in a way that supports economic growth,” the State Bank of Vietnam told Reuters in an emailed statement.

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Central banks around the world are raising their key interest rates, some aggressively, to contain inflation that is reaching multi-decade highs in some countries.

Consumer prices in Vietnam in June rose 3.37 percent from a year earlier, driven by higher food and energy costs. Vietnam aims to cap inflation at 4% for this year.

The central bank said it had kept key rates unchanged this year while helping local banks boost liquidity, “and that has helped businesses and the economy gain better access to bank loans.”

The central bank said it was encouraging financial institutions to cut costs so they could lower their interest rates on loans to support business activities, adding that it would ensure their liquidity using open market operations.

“The central bank will closely monitor the domestic and international money market and the inflation situation to implement an interest rate policy that contributes to macroeconomic stability and inflation control,” he said. he declares.

Vietnam is targeting GDP growth of 6.0% to 6.5% this year, recovering from last year’s 2.58% growth, the slowest pace in decades due to the pandemic.

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Reporting by Khanh Vu; Editing by Kanupriya Kapoor

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