SBV looks to increase dong deposits   Deposits in Vietnamese dong at banks are seen as a good investment tool to secure money while enjoying stable interest rates. - VNA/VNS Photo Tran Viet HA NOI (VNS) - The State Bank of Viet Nam (SBV) is determined to maintain the strength of the Vietnamese dong, while speeding reforms to the nation's economic system and resolving troubled loans. Central bank Governor Nguyen Van Binh has described 2013 as a successful year in reforming the nation's monetary policy system. "The consistency of the monetary policy will continue in the coming years. Then, we can confirm to those who have deposited Vietnamese dong in banks, and to those who haven't, that they should be more confident about depositing their money in banks. This investment channel is, indeed, secure and attractive," Binh said. Other economic experts also repeated the central bank's recommendation to deposit money in the banks. Central Institute for Economic Management (CIEM) Deputy Director Vo Tri Thanh added that the central bank monetary policy, along with foreign exchange rates, appeared to be more supportive of the Vietnamese dong than for the US dollar. Le Xuan Nghia, former deputy chairman of the National Financial Supervisory Committee, also advised the public that savings was a good alternative for investing their money. And in the current context of sluggish stock and real estate markets, if an investor considers the interest against risks, savings appeared to be a popular choice, said Quach Manh Hao, head of the finance and banking department at Ha Noi National University's Economics University. However, experts remain concerned that risks to the economy continue because of attempts to revive the economy through public investment, which might cause instability due to ineffective management and collaboration. Such potential instability reduces the attractiveness of the dong, they add. These concerns might also become widespread throughout the public. "I'm not sure how safe and beneficial dong deposits would be. The only one thing I know for sure is that I have to pay more and more for the same consumer items than I previously did. I prefer deposits in foreign currencies, at least until I can see some certainty," said Do Thi Hai, a retailer who just converted her money to Euros. Public confidence In an attempt to revive public confidence in the dong, as well as to help the economy recover, the central bank has taken bold steps to restructure the nine weakest banks, which were on the verge of a crisis after many years of excessive credit growth and unsecured lending. Under the banking restructuring plan, and with an eye towards 2015, which was a program initiated last April to improve the resilience of the money system, the SBV has received proposals from 24 out of 25 joint stock commercial banks and has given its approval to 11 of these proposals. Handling bad debt is the focus of the reforms. The Viet Nam Asset Management Company (VAMC), which is monitored by the SBV, was launched in an attempt to clear balance sheets and boost the liquidity of domestic banks. Bad debt currently is listed at VND142.3 trillion (US$6.78 billion) based upon bank reports, according to deputy governor Le Minh Hung's statement early this month. By the end of September, Viet Nam's bad debt accounted for 4.62 per cent of total loans. Binh added that the VAMC helped consolidate all bad debts, which would gradually create a complete debt market for local and foreign investors to participate in. "Our VAMC model is different from other models adapted in the world, however, it suits the situation for our state budget. It hasn't resolved bad debt completely, but it serves as a good instrument for all parties, including banks, the economy and investors," Binh said. In another development, the State Bank of Viet Nam also issued policies to support agricultural production. To facilitate farmers' access to loans, the SBV has applied a ceiling interest rate for long-term loans with a current rate of 9 percent. If farmers or agricultural enterprises prove that their projects would be productive, they would then be given access to loans, Binh confirmed. - VNS