Banking & Finance

Since Covid-19 first broke out, central banks around the world have loosened monetary policies to support economic recovery. Changes are now being made, however, to deal with rising prices and inflation. In Vietnam, meanwhile, the CPI is still low and it will be difficult to reach GDP growth targets, so it is likely that the State Bank of Vietnam will maintain its loosened monetary policy as it is effective in supporting economic recovery and has not caused any significant concerns about inflation.

The State Bank of Vietnam (SBV) has proposed eight solutions for the second half of 2021 as Covid-19 continues to make its presence felt. Notable points include conducting flexible monetary policy, maintaining liquidity in the banking system, synchronizing monetary, credit, and liquidity solutions to support economic recovery, managing interest rates in line with the macro balance, inflation, and market movements to reduce customer repayments, insisting businesses use telecommunications accounts to pay for goods and services of small value (Mobile-Money), and implementing the plan for the digital transformation of the banking sector to 2025 with an orientation to 2030.

Vietnam’s stock market is one of the fastest growing in the world, but the high proportion of stocks in major industries makes retail investors cautious. The banking sector accounts for 34.55 per cent and real estate 21.39 per cent, for a total of 55.94 per cent; a ratio rarely found elsewhere. To enhance the durability of the market, it is important to diversify sectors. Production and business sectors associated with science and technology should be among those driving the market.

Rising prices have given fertilizer stocks higher valuations and greater appeal.

According to a report from the Ministry of Finance, total insurance premium revenue stood at VND96.8 trillion ($4.2 billion) in the first half of 2021, an increase of 16.2 per cent year-on-year.

Many banks and businesses have applied modern technologies to their services amid the pandemic, such as eKYC (electronic know-your-customer, for account openings), QR codes, and non-cash payment services in order to offer customers a more convenient experience.