Vietnamââ‚¬â„¢s central bank has raised the money supply growth target for 2010 to 28 percent from 25 percent while keeping the annual credit growth target unchanged at 25 percent, its governor said on Friday.
State Bank of Vietnam Governor Nguyen Van Giau also said in an interview published on the central bankââ‚¬â„¢s website (www.sbv.gov.vn) that a good performance by the Dung Quat oil refinery would help limit foreign exchange spending on imports.
Bank employees count Vietnamese dong at a bank in Hanoi. Vietnamââ‚¬â„¢s central bank has effectively devalued the currency for the second time in three months amid widespread concerns over a high trade deficit and inflation.
He was speaking a day after the central bank devalued the dong by 3.25 percent to help balance the foreign exchange market and control the trade deficit.
ââ‚¬Å“However, in general Vietnamââ‚¬â„¢s potential (in forex supply) is promising,ââ‚¬ Giau said in the interview, citing the potential for cement exports and reducing fertilizer imports.
Vietnam imported 12.5 million tons of refined oil products last year, down 3.5 percent from a year ago, as the Dung Quat refinery started production. In value terms, it stood at US$6.16 billion, down 43.8 percent from 2008, according to government statistics.
Vietnamââ‚¬â„¢s first refinery is running at 85-100 percent of capacity and has already produced petrol, diesel and other products for domestic markets, it said on Wednesday.
Giau said Vietnam was aiming to achieve an economic growth of 6.5 percent while containing inflation below 7 percent.
In late December the central bank said it was aiming to limit growth in credit and broad money supply at 25 percent.
Banksââ‚¬â„¢ lending in January rose 1 percent from last December, a normal pace for the month, the central bank has said.
But cash demand and consumer spending rose significantly this month before Tet, or the countryââ‚¬â„¢s biggest festival between Feb 13-18 to mark the Lunar New Year start, and several economists have said inflation this year could hit double digits.
Broad money supply, or M2, refers to money in circulation and comes in various forms from banknotes and coins to travelerââ‚¬â„¢s checks of non-bank issuers to demand deposits to large time deposits.