Prudent monetary policy helps control inflation in Q1
The State Bank of Vietnam (SBV)’s continuation of a prudent monetary policy is a reason for the slight year-on-year decrease of the core inflation in the first quarter of 2017.
Consumers shop at the Big C market in Hue city (Photo: VNA)
Hanoi (VNA) – The State Bank of Vietnam (SBV)’scontinuation of a prudent monetary policy is a reason for the slightyear-on-year decrease of the core inflation in the first quarter of 2017.
The assessment was made by Director of theVietnam Institute for Economic and Policy Research (VEPR) Nguyen Duc Thanh at ameeting in Hanoi on April 10 to release a report on Vietnam’s macro-economy inQ1.
The VEPR research team cited the SBV as sayingthat money supply in the first three months of 2017 increased 3.52 percent fromthe end of 2016, slightly lower than that in the same period last year.
The first quarter posted the fastest creditgrowth rate in many years, 4 percent compared to the end of 2016, indicatingbusinesses’ stronger absorption of capital.
However, the modest rise in the mobilisedcapital led to a gap between capital mobilisation and lending which might bethe cause of the recent slight disturbance in inter-bank interest rates.
VEPR researchers said although the pressure oninflation showed signs of easing in Q1, it remains big, especially when theeconomic growth between January and March (5.1 percent) is much lower than the6.7-percent target for the whole year set by the National Assembly.
It is hard to control inflation at below 4percent in the next months since the domestic consumption demand and globalprices of basic commodities will rebound while prices of public services willbe adjusted as scheduled, they said.
Expert Truong Dinh Tuyen said if the US’sFederal Reserve continues to hike interest rates, the US dollar will getstronger, putting more pressure on the VND/USD exchange rate and inflation.-VNA
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Consumers shop at the Big C market in Hue city (Photo: VNA) 
