“Vietnam has weathered the global economic crisis well and is likely to achieve a growth rate of 6.5 % this year,” said ANZ Banking Group CEO Mike Smith at a meeting with enterprises.
What are your points of views about operations of the Vietnamese banking system in relation to economic development in the past time?
In my opinion, the Vietnamese banking system continues to be developed and reformed. And, clearly, when the State management over the banking system or any certain area descended, this activity is applied slowly with a chosen roadmap. I think foreign banks also acted rationally. For example, although foreign banks still have certain restrictions like holding cap in local banks, they can still set up a 100 % owned lender in Vietnam.
You forecast that the Vietnamese economy will grow 6.5 % this year. What are the grounds for your estimation amid uncertainties of global economic recovery?
Vietnam, in fact, firmly withstood the global economic crisis. Personally, I believe that Vietnam can achieve a growth of even over 6.5 % if regional countries also made positive growth, especially China growing as expected.
However, with a quite high growth of CPI in the first months of the year, many experts feared that Vietnam would have to face up with high inflation in 2010?
Inflation is always a matter of concern but, in my point of view, [Vietnam] should solve inflationary concerns rather than confront too slow economic recovery and deflation in many countries.
And, inflation will surely affect interest rates?
If inflation returns, [Vietnam] may hike interest rate.
Whether or not we will fall into a vicious circle as higher interest rate will of course give a boost to the return of inflation?
In reality, the interest rate is a hard nut to crack problem because it will intensify the return of inflation. Therefore, all State-owned banks must be very careful with interest rate policy. Especially, in the US and European countries, how to retain long-term and sustainable economic development is more important than the issue of inflation. Therefore, how to retain the interest rate remain is an important element to ensure sustainable economic growth.
As a result, central banks in the world have not raised the interest rate as they wait for the sustainability of global economic recovery.
Do you mean Vietnam should not hike the interest rate now?
It is important to note that the economic recovery will create higher demand for loans to develop production. If the interest rate increases, the demand can be reduced because companies will face more difficulty in accessing loans.
Of course, to ensure the healthy and profit-making operation of banking system, the State Bank of Vietnam (SBV) should take it into account. However, I think, commercial banks also need to actively improve credit operations, not highly dependent on State policies.
What is your viewpoint about the State Bank of Vietnam’s recent circular that allows negotiable interest rate for medium and long-term loans?
The application of negotiable interest rate for medium and long-term loans is extremely good for creating a more competitive lending environment than before.
What about the recent change to foreign exchange rate?
The devaluation of the local currency is always a very thorny issue for any country because there are always negative reactions. But, all such adverse impacts are short-lived while investors will look at fundamental elements and real economic growth capacity. Forex risk is always taken into account by investors when they decide to invest. Thus, it is not necessary to worry too much.
In the angle of economy and market, the important factor is the long-term vision. And, to maintain the sustainability of economy, companies also need long-term visions.
At specific points of time, the State Bank of Vietnam will make appropriate decisions because maintaining the currency value to avoid inflation rise and retain growth is very difficult but it is more important to increase FDI and equitise State-owned enterprises. And, I believe that the potential of Vietnam is very attractive.
P.T
Vietnamese
