On February 4, the Governor of the State Bank issued a written request to credit institutions to grasp the situation to have solutions to support capital-loaning customers and enterprises affected by the corona virus disease.
Answering BizLIVE, The chairman of the board of directors of a large commercial bank said that from February 5, his banking system would conduct review and evaluation to make initial reports.
Accordingly, it will take a certain time for the adverse effects of the corona virus disease on enterprises to be evaluated and realized, and there are sectors that have to wait for the impact delay to be recorded. When shaping the facilities and calculating the impact, the bank will determine the solution and level of support such as debt repayment structure, consideration of interest rate reduction and exemption, etc.
On February 5, the Government held its regular meeting in January 2020 which resulted in the expectation that the GDP growth in the first quarter of 2020 may decrease by about 1%.
Before determining the solutions and support levels, at the moment, the State Bank of Vietnam is still having to increase its monetary policies governing regulations, especially in monetary balancing.
As BizLIVE has updated recently, from the phenomenon of two consecutive sessions before the Lunar New Year holiday to the last weekend and up until February 5, The State Bank has consecutively and seamlessly withdrawn money from the system of credit institutions.
Notably, in yesterday's session (February 5), operators significantly increased the scale of withdrawal as it withdrew approximately 8000 billion VND while the number from the previous session was only 5000 billion VND. Generally, the total withdrawal at the moment is up to 43000 billion VND through the outstanding balance of SBV bills.
The majority of the money in the State Bank of Vietnam has an interest rate of 2.65%/year, with a 91-day term, which means that a major part of the money will focus on maturing and flowing back to the market from April 2020.
As mentioned above, the manufacturing business activities of several sectors are expected to suffer from negativities created by the corona virus, the economic development may decrease notably from the first quarter of 2020, and some statements from investment organizations have recently mentioned the possibility of the monetary policies receiving support via interest rate reduction or credit widening, etc.
However, as it is being shown, at first the State Bank of Vietnam still has to implement governing regulations in monetary balancing. This balance needs to be paid attention to in 2020.
Specifically, in the Government Conference with localities at the end of 2019, Governor Le Minh Hung said that in 2019, we had purchased about 20 billion USD, pumping approximately 500000 billion VND into the economy.
The amount of money given is large, requiring regulating and neutralizing operations to minimize the adverse impact on inflation. Meanwhile, inflation in January has abnormally increased to the highest level in the last 7 years. Therefore, the scale of withdrawing money of nearly VND 43,000 as of February 5 is not expected to stop.
However, under the influence of the corona virus epidemic, typically in China or South Korea, monetary policy has been activated to enhance economic support.
In Vietnam, support measures, in general, are only at the stage of calculation and consideration, as the Prime Minister asked ministries and agencies in yesterday's regular meeting (February 5).
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