Governor of the
State Bank of Vietnam
Nguyen Van Giau talked to the press about his life and shared his thoughts about the banking
operation in 2011.

The macroeconomic uncertainties in
2011 and previous years have been mentioned many times by experts and
newspapers. What should Vietnam
do in order to settle the problems? Where should we start?

Governor of the State Bank of Vietnam Nguyen Van Giau

The
National Assembly many times discussed the macroeconomic stabilization and National
Assembly’s deputies believe that it is necessary to restructure the national
economy.

Regarding
the inflation rate, I think that we need to send a message about how tight the
fiscal policy will be.

Secondly,
it is necessary to reconsider the investment policies, including foreign direct
investment and Vietnam’s
outward investment. Vietnam
has been making outward investment for just several years, but the volume of
foreign currencies flowing out of Vietnam has reached $8.2 billion.

Thirdly,
it is necessary to reconsider the actual overspending. Developing countries
only allow the overspending equal to five percent of GDP, while developed
countries three percent.

The
fourth problem now is the foreign debts due to the current balance deficit,
while the root of the problem is the imbalance between savings and investments.
When there is problem with the current balance, this should be offset by
foreign investment. The current proportion is 11 percent, a worrying figure,
while 5-6 percent would be more reasonable.

The
fifth problem is the trade deficit which will weaken the international payment
balance and make the local currency lose its value.

Some experts say that the current
monetary policies are just following the market. What would you say about this?

We
should not follow this way of thinking. The operations of banks are always
closely linked to the market. “Active, cautious and flexible” is our motto in
the monetary policy management. We take initiative in regulating the market, we
do not “follow in the tail of events”.

Regarding
the story about high interest rates, we should understand that the interest
rates would continue to be high until the inflation rate remains high.

I
have submitted to the Prime Minister the plan on regulating the interest rates
for 2011 which, if approved, will give more power to the governor.

Regarding
the exchange rate, though there were many difficulties, everything got better
towards the year end. In 2010, we thought that we would have $7.3 billion in
kieu hoi (overseas remittance), but the real volume reached $8.3 billion.
Meanwhile, we had $1 billion in foreign portfolio investment, higher than that
in 2009. Besides, the prosperous tourism industry also served as the good
source of foreign currencies. Meanwhile, the export turnover raised to $19
billion thanks to the flexible exchange rate policy.

For the first time, Vietnam has its
representative acting as the Chair of the Governors of the Banks. Could you
please tell me when did you learn English, as speak English fluently?

I
can speak French fluently because I learned French a long time ago. Meanwhile,
I only began studying English in November 1991, when I took the office as
Deputy General Director of Agribank. Now I still keep studying English. I have
one hour of English with teachers a week?. Therefore, I can talk directly with
leaders of ADB, IMF or WB without interpreters.

Many people recall the story about
how you gave up smoking. What did you do?

I
was a credit officer. I had to work with farmers and traveled a lot. So I
started smoking and  got addicted.
However, when I traveled abroad on business, I found that smoking was
prohibited in many places, and if I wanted to smoke, I had to move to the
places reserved for smokers. It was so inconvenient

One
time, in 1995, I went on a business to a mountainous area in Cambodia.
Before leaving, the district’s head asked his staff to go somewhere to buy
cigarettes to give me as a present. It took the staff a lot of time to bring
cigarettes back, which made me think. After the trip, I decided to give up
smoking.

A heard from someone that you have a
brother, who once asked you about the exchange rate policy, but you refused to
give answers. Is this right?

In
May 2008, I returned to the home village, where I attended a family reunion
party. My brother, who was working for a state owned enterprise in An Giang,
asked me how the exchange rate would be, because he wants to know information
to decide what to do with the three million dollar his enterprises had got from
farm produce exports.

“I
you ask me as a citizen, then I don’t know the answer. If you ask me as a
Governor, then Governor never answers such as question,” I replied.

Source: Thoi bao Kinh te Vietnam