Which tools are used for the implementation of the national monetary policy in Vietnam? What are regulations on the national monetary policy and competence to decide on the national monetary policy in Vietnam?

Which tools are used for the implementation of the national monetary policy in Vietnam?

Pursuant to Article 10 of the Law on the State Bank of Vietnam in 2010 stipulating tools for the implementation of the national monetary policy:

Tools for the implementation of the national monetary policy

The Governor of the Stale Bank shall decide on the use of tools for the implementation of the national monetary policy, including re-financing, interest rates, exchange rates, reserve requirements, open-market operations and other tools and measures as prescribed by the Government.

As regulated above, the Governor of the Stale Bank shall decide on the use of tools for the implementation of the national monetary policy. The tools for the implementation of the national monetary policy include:

- Re-financing: a form of extending credits by the State Bank, aiming to provide short-term capital and payment instruments for credit institutions.

- Interest rates: The State Bank shall announce the re­financing interest rate, prime interest rate and other interest rates to serve the regulation of the monetary policy and the fight against usury.

- Exchange rates: Exchange rates of Vietnam dong shall be determined on the basis of the foreign currency supply and demand in the state-regulated market.

- Reserve requirements: a sum of money to be deposited by a credit institution at the State Bank to serve the implementation of the national monetary policy.

- Open-market operations: The State Bank shall carry out open-market operations through the purchase and sale of valuable papers with credit institutions.

- Other tools and measures as prescribed by the Government.

Which tools are used for the implementation of the national monetary policy in Vietnam? What are regulations on the national monetary policy and competence to decide on the national monetary policy in Vietnam? - image from internet

Which entity shall lead and manage the national monetary policy in Vietnam?

Pursuant to Article 8 of the Law on the State Bank of Vietnam in 2010 stipulating regulations on leading and managing the State Bank:

Leading and managing the State Bank

1. The Governor of the State Bank is a cabinet member, the head and leader of the State Bank who shall take responsibility before the Prime Minister and the National Assembly for the state management in the monetary and banking sector.

2. The Governor of the State Bank has the following tasks and powers:

a/ To organize and direct the implementation of the national monetary policy according to his/ her competence:

b/ To organize and direct the performance of tasks and the exercise of powers of the State Bank according to this Law and other relevant laws;

c/ To act as the legal representative of the State Bank.

As regulated above, the Governor of the State Bank is responsible for leading and managing the national monetary policy in Vietnam.

What are regulations on the national monetary policy and competence to decide on the national monetary policy in Vietnam?

Pursuant to Article 3 of the Law on the State Bank of Vietnam in 2010 stipulating the national monetary policy and competence to decide on the national monetary policy in Vietnam:

National monetary policy and competence to decide on the national monetary policy

1. The national monetary policy consists of national-level decisions on monetary affairs made by competent state agencies, including decisions on the objective of currency value stability which is denoted by the inflation rate and decisions on the use of tools and measures to obtain the set objective.

2. The National Assembly shall decide on annual inflation rate targets by making decisions on consumer price indexes and overseeing the implementation of the national monetary policy.

3. The President shall perform his/her tasks and powers provided by the Constitution and laws in negotiating, concluding and acceding to, in the name of the State of the Socialist Republic of Vietnam, treaties on monetary and banking matters.

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As regulated above, the national monetary policy and competence to decide on the national monetary policy are stipulated as follows:

- The national monetary policy consists of national-level decisions on monetary affairs made by competent state agencies, including decisions on the objective of currency value stability which is denoted by the inflation rate and decisions on the use of tools and measures to obtain the set objective.

- The National Assembly shall decide on annual inflation rate targets by making decisions on consumer price indexes and overseeing the implementation of the national monetary policy.

- The President shall perform his/her tasks and powers provided by the Constitution and laws in negotiating, concluding and acceding to, in the name of the State of the Socialist Republic of Vietnam, treaties on monetary and banking matters.

- The Government shall propose the National Assembly to decide on annual inflation rate targets. The Prime Minister or the Governor of the State Bank shall decide on the use of administrative tools and measures to obtain objectives of the national monetary policy according to the Government's regulations.

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