Vietnam should set up a fund to stabilise VND/USD exchange rate, according to Dr. Tran Du Lich, a member of the National Assembly’s Economics Committee.
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Dr. Lich said that capital for such a fund could be obtained from reserves of the State Bank and loans from state-owned commercial banks.
The fund would be managed by the state bank, with the aim of stabilising the inter-bank exchange rate between VND and USD. The official exchange rate would be fixed at VND21,000 for the entire year.
He also suggested tightening monetary policies, lowering credit growth to below 20% this year and closely monitoring public investment projects to improve efficiency.
According to Lich, Vietnam will have to accept new prices, and regulatory levels will have to be set according to market levels. It would be better to make changes now to curb spiraling inflation in order to keep a stable economy in the long term; then companies can work out business plans without fear of violent changes in the market.
Also he said that measures should be taken from March to stabilise the exchange rate, as well as get inflation under control by the second quarter. Interest rates could be decreased gradually until late in the year, he added.
Lich believes that strong measures are needed in Vietnam to achieve the goal of 6% growth in GDP, and to keep the VND/USD exchange rate stable.
The prime minister has also issued policies to curb inflation that would increase state budget revenues, while placing a 5% cap on deficit spending. The list of state development projects will be prioritised this year, and regular expenditures will be decreased by 10%.
