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money and banking, financial market

chapter 1

hai yen phan chau

on 3 August 2013

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Transcript of money and banking, financial market

Discount rate
Financial Markets and institutions
contractionary monetary policy of Vietnams 2011-2012
Group 2:
Vo Thuy Trang
Nguyen Thi Thuong
Vo Thi Hong Thao
Bui Thi Anh Thu
Huynh Thi Bich Van
Nguyen Thi Thiep
Nguyen Tan Vuong

Instructions: Tran Dinh Uyen
contractionary monetary policy of Vietnams 2011-2012
open market operation
Effect of contractionary monetary policy

Start promoting race to raise interest rates
Generate pressure on the growth and employment
The currency appreciation
increased passive and liquidity risk for active bank
monetary imbalances, foreign currency liquidity tension and pressure rates
control inflation from very high levels of 18.13% in 2011 to around 7% in late 2012
Stable exchange rate, foreign exchange reserves are increased, the balance of payment improved, the gold market is more tightly controlled
Activity in the interbank market and open market operations are the new development step.
In Vietnams
Thanks for your attention
1. Overview economy of the world and Vietnams.

2. Contractionary monetary policy.

3. Effect of contractionary monetary policy.

4. Petition overcoming limitations of monetary policy contractionary.
Overview economy of the world
- 2012 the world economy continued to have great uncertainties.

- 2012 will be a year with economic growth and the Lowest industrial, commercial weakest of the three most recent years on a global scale.

- The global economy continues to weaken.
contractionarymonetary policy
SBV selling securities of government.
Used to influence the money supply.
Commercial bank and the general public.
open market sales of securities by the SBV.

Discount rate increas.

Reserve requirement ratio increases
primary market
2011: 81.716 billions VND

2012: 87.464 billions VND
secondary market
2011: 88,6 trillion

2012: 124,55 trillion
raise interest rates to attract outstanding

amount of cash has contributed to decrease

aggregate demand leads to lower inflation
- Many business bankruptcy
- Unemployment increased
- GDP in recent years
2010: 6.78%
2011: 5.89%
2012: 5.5%
Reserve requirements ratio
State Bank increased the reserve ratio required to implement tight monetary policy, prudent to curb inflation; flexible management tools of monetary policy to ensure growth of credit 2011 less than 20%, the total payment of about 15-16%
contractionary monetary policy
reserve requirement ratio for deposits and term deposits with maturities of less than 12 months in a foreign currency is 8% of total deposits, up 1% compared to the previous
reserve requirement ratio of credit institutions and commercial banks on fixed deposits VND 3% throughout the period 2009 to 2012 and has not changed.
positive impact
negative impact
To perfect the legal basis and the economic content of the base rate became standard interest, interest rates driven to executive for money market operations
Construction, improvement of the method of determining the interest rate and the executive mechanism of interest
Inflation control targets from 2013-1015 target: 8% - <10% / year
Issued purchase bad debt mechanism to remove legal obstacles to faster processing of bad debt.
recommendations and proposals
Full transcript