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Title: On the conduct of monetary policy in Vietnam
Authors: Pham, Thi Thu Tra
Riedel, James
Keywords: monetary policy;Vietnam
Issue Date: 2012
Publisher: WILEY-BLACKWELL, 111 RIVER ST, HOBOKEN 07030-5774, NJ USA
Abstract: Vietnam has the highest inflation rate in Southeast Asia (over 20 per cent year-on-year in 2011). This paper examines the extent to which inflation in Vietnam is due to its conduct of monetary policy. It is argued that, had the central bank implemented policy on a more timely basis, inflation would not have been as high as it was, but the more fundamental problem is that the central bank does not have the tools it needs to conduct monetary policy effectively. Monetary policy is further complicated by Vietnam's exchange rate policy. By choosing to peg the currency and maintain fairly free capital mobility, the country has all but given up the ability to pursue an independent monetary policy. As a consequence, the central bank is forced to attempt to sterilise its foreign exchange interventions, which it is ill-equipped to do. The paper argues that financial sector liberalisation is needed not only to promote growth but also to maintain macroeconomic stability.
Description: TNS06884 ; ASIAN-PACIFIC ECONOMIC LITERATURE Volume: 26 Issue: 1 Pages: 34-45 Published: MAY 2012
ISSN: 0818-9935
Appears in Collections:Bài báo của ĐHQGHN trong Web of Science

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