VietnameseOfficial Dispatch No. 319/TTg-KTTH of March 03, 2008, intensification of inflation control measures in 2008
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Official Dispatch No. 319/TTg-KTTH of March 03, 2008, intensification of inflation control measures in 2008
| Issuing body: | Prime Minister | Effective date: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Official number: | 319/TTg-KTTH | Signer: | Nguyen Sinh Hung |
| Type: | Official Dispatch | Expiry date: | Updating |
| Issuing date: | 03/03/2008 | Effect status: | Known Please log in to a subscriber account to use this function. Don’t have an account? Register here |
| Fields: | Commerce - Advertising , Policy |
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THE PRIME MINISTER ---------- | SOCIALIST REPUBLIC OF VIETNAM Independence Freedom Happiness ---------------- |
No. 319/TTg-KTTH Re: intensification of inflation control measures in 2008 | Hanoi, March 03, 2008 |
To: | - The State Bank of Vietnam - Ministries of Finance, Planning and Investment, Industry and Trade, Construction - State Securities Commission of Vietnam. |
Considering the report No. 98/NHNN-VP.m dated 27 February 2008 of the National Consultant Council of monetary, financial policies on the assessment to the implementation of the said policies in the first two months of 2008 and managing solutions in the coming months, opinions of Deputy Prime Ministers, Ministries, Industries and concerned agencies at the Governments Standing Meeting held on 28 February 2008, the Prime Minister would like to provide his opinions as follows:
1. To agree with assessments, forecasts and some suggestions relating to the solutions for the management of monetary, financial policies mentioned in the above mentioned report of the National Consultant Council of monetary, financial policies. The management of monetary, financial policies in the first two months of 2008 takes place in the situation that the prices of energy, raw materials and food in the world continue to increase, the US economy and the world economy decline, which strongly affects our economy. Although the Prime Minister has directed Ministries, Industries, localities to manage measures of controlling price, inflation since the early year, actually, the consumer price index in the first two months keep increasing at high ratio (6.02%), which is a big challenge for the implementation of planned targets of growth and inflation in 2008.
2. In the rest months of 2008, the world market price would probably keep increasing and shall cause strong effect to the inflation and socio economic development of our country. In order to well implement targets of the 2008 socio economic plan in general, it is requested for Ministries, industries, localities to concentrate on, coordinate in conducting the good implementation of measures of controlling inflation, price increase, in parallel with the production promotion, ensuring macroeconomic stability.
3. To continue the good implementation of tasks as conducted by the Prime Minister at the Official Dispatch No. 75/TTg-KTTH dated 15 January 2008 on the measures of controlling inflation, price increase in 2008.
4. To improve the investment environment in order to mobilize sufficient capital for the satisfaction of the growth requirement; at the same time, to pay special attention to the improvement of efficiency of investment capital use, especially in the public investment sector; to reconsider works, projects of which the capital has been unsettled for ages, the initial design has become unsuitable or the investment is ineffective; to suspend or to delay the works which are not really necessary.
5. Ministries, industries and localities shall closely coordinate with each other in the implementation of policies, especially monetary, financial policies, policy on the production promotion, ensuring macroeconomic stability. To continue the strict, active, flexible implementation of the monetary policy; to manage the financial policy under the orientation of tightening expenditure, enhancing the efficiency of budget capital use, limiting overspending of budget, together with the good implementation of salary policy, investment policy, import export policy so as to ensure a synchronic coordination, to support, speed up one another for a best efficiency.
6. The State Bank shall promulgate and perform the capital support to commercial banks in order to ensure the solvency; at the same time, to consider the increase of required reserves, continue to apply the promulgated measures of buying required bills of the State Bank in line with the monetary situation and sustainability of credit institutions. To implement the policy of real positive interest rate based on the market mechanism; to perform a flexible management to the monetary policy, efficient use of open market instruments, required reserve, discount interest rate, refinancing interest rate and base interest rate, to ensure a proper relation among types of interest rates of bonds, Treasury bills, bills of the State Bank. The Ministry of Finance shall promptly conduct the transfer of deposit balance of Treasury in current commercial banks to the State Bank for facilitating the good management of the monetary policy.
7. To continue the purchase of foreign currencies of investors, the priority order in buying foreign currency of subjects should be taken into consideration. To research and deploy the domestic issuance of Government bonds in Vietnamese dong, Government bonds in foreign currencies in order to limit the dolarization in the economy, collect idle money, reduce the pressure of inflation and raise the national reserve or overseas investment. To continue managing the exchange rate between Vietnamese dong and US dollar in particular and foreign currencies in general based on the demand and supply of the market with the fluctuation margin of 2%.
8. To manage the banking credit activity with the maximum credit growth rate of 30%, providing that the capital requirement for the economic growth is satisfied and to encourage the agricultural and rural development. To intensify the control, improvement of credit quality under international standards.
9. Financial, monetary, credit solutions, policies should continue to facilitate the healthy development of the real estates market. Solutions of anti speculation of real estates should be applied through the control of credit, tax policy in combination with necessary administrative measures. The Ministry of Construction, concerned Ministries, industries and localities should adjust the planning, verify portfolios, projects so as to increase the supply source of real estates, to keep the balance and a healthy development of real estates market. For good projects with sound and healthy investment, the bank shall continue to provide credit. If any act of storage, speculation, buying and reselling is detected, capital thereof shall be recovered and determinedly dealt with, especially for the state owned enterprises which have no function to participate in this market. To enhance the increase of supply for the market to meet the demand for houses, the development of urban and industrial zones
10. To promptly complete the Plan of stability and sustainable development, securities market development. To implement measures of recovering, developing the market, nor letting the market go down. To facilitate the increase of the supply of goods, not to restrain the publication and listing in exchange centers by companies. To prepare the progress of equitization and IPO for state owned enterprises, especially corporations and large enterprises; it is inadvisable to consider the sale of shares at the highest price as a standard of IPO. To continue the implementation of the Decision No. 03/2008/QD-NHNN dated 01 February 2008 on the control of lending for securities investment and trading; contents of the Decision should also be clearly disseminated to avoid the thought that the State tends to narrow the market.
11. To consider and submit to the Prime Minister the possibility of establishing wholly foreign owned fund management companies, branches in Vietnam so as to manage investment funds mobilizing capital from the foreign countries and to efficiently attract foreign invested capital, to enhance the publicity, transparency and better manage these activities, not to allow Representative Offices to perform their business contrary to provisions of applicable laws.
12. To research and submit to the Government the regulation on the holding ratio of foreign investors for unlisted securities, providing that the management requirement is ensured, risk is minimized and it is not higher than the current ratio applicable to the listed companies and at the same time it is in line with the companys charter.
13. To research and make report to the Prime Minister on the possibility of permitting the State Capital Trading and Investment Corporation to buy some types of good stocks which are efficient with high liquidity in necessary cases.
14. The establishment of more securities companies and joint stock commercial banks must be controlled in a manner that full conditions and stipulated standards are ensured; together with the increase in volume, commercial banks, securities companies should be facilitated for early stability and gradual development, improving financial capacity and operation scale which makes contribution to the market scale acceleration.
15. In the current condition, temporarily the overseas issuance of Government bonds should not be performed in order to attract the domestic available foreign currency source.
16. To concentrate on the exploitation and expansion of market for export, striving for the target of annual export growth of over 25%.
17. The Ministry of Trade and Industry and local Peoples Committees intensify the direction of good control to the local market, anti-speculation for raising price, abusing the inflation, abusing the monopoly position for benefit and offending against the consumers benefit. To research the application of appropriate measures to control price of exclusive goods, such as limit valuation, price registration, announcement, price declaration, posting up price and selling at the posted prices.
18. The State Bank of Vietnam, Ministries of Finance, Industry and Trade, Construction, Planning and Investment and the State Securities Commission, on a regular basis, update and timely provide financial, monetary, securities information and measures of restraining the inflation, controlling the price increase, production development from the Government so as to create an official information channel for the people, making contribution to the orientation of the public opinion; at the same time, perform the weekly handing over about the performance of the inflation control and economic development measures.
19. The Ministry of Information and Communications conducts mass media agencies to closely coordinate with related Governments agencies to publish correct information, articles; support the guidelines, policies of the State in this sensitive area to avoid untruthful information, information which excites, causes an insecure sensation in the society./.
FOR THE PRIME MINISTER DEPUTY PRIME MINISTER Nguyen Sinh Hung |
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