MONEY AND BANKING ESSAY MONETARY POLICY IN RESPONSE TO EFFECTS OF COVID 19 IN VIETNAM

 FOREIGN TRADE UNIVERSITY INSTITUTE OF  ECONOMICS AND INTERNATIONAL  BUSINESS *** MONEY  AND BANKING ESSAY   MONETARY  POLICY  IN RESPONSE TO EFFECTS OF  COVID-19 IN VIETNAM Class: TCHE303(GD2-HK1-2021).1 Instructor: MS Fin Tran Thi Minh Tram Implementation group: Group Ha Noi, December 2021 Members of group 4 Evaluation Full name Task done Thái Diệu Đan (Leader) Suggest topic, outline; Write content of 1.5, 2.1, and 4.1 100 Vũ Mạnh Tuấn Suggest topic; Write content of 1.4, 3.2; Do formatting 100 Nguyễn Thị Thu Hằng Suggest outline; Write content of 1.2, 4.3; Prepare PowerPoint 100 Lê Ngọc Ly Write content of Intro, 3.2; Presenting 100 Nguyễn Linh Khanh Write content of Intro, 3.1; Presenting 100 Nguyễn Nhật Linh Write content of 1.3, 5.2; Presenting 100 Vũ Hạnh Nguyên Write content of 1.1; 4.3; Prepare PowerPoint 100 Table of content  Introduction Chapter 1: The theoretical basis of monetary policy 1.1 Definition of monetary policy 1.2 Position in the economy 1.3 Goals of monetary policy 1.4 Types of monetary policy 14 1.4.1 Tight monetary policy 14 1.4.2 Expansionary monetary policy 14 1.5 Tools 15 1.5.1 Reserve Requirements 15 1.5.2 Open Market Operations 15 1.5.3 The Discount Rate 15 Chapter 2: The impact of Covid-19 on Vietnam's economy 16 2.1 The background of the Covid-19 pandemic in Vietnam 16 2.2 The impact of the Covid-19 epidemic on the overall economy 18 2.2.1 Macro indicators 18 2.2.1.1 GDP 18 2.2.1.2 Inflation 19 2.2.2 Government budget 2.2.2.1 Government budget revenue 20 20 21 2.2.2.2 Government budget expenditure 2.2.3 Enterprises and employees 21 22 Chapter 3: Current status of monetary policy in Vietnam in responding to the impact of the Covid-19 epidemic 25 3.1 Overview of Monetary policy in Vietnam in the period of 2020-2021 25 3.1.1 Interest rate policy 25 3.1.2 Debt term restructure, loan interest exemption policy 25 3.1.3 Credit support policy from banking industry 25 3.2 Current status of applying monetary policy tools in Vietnam 26 3.3 The effectiveness of monetary policy in Vietnam during the Covid-19 pandemic 28 3.3.1 Overall results 28 3.3.2 Effectiveness of Interest Rate Policy 31 3.3.3 Effectiveness of Debt term restructure, loan interest exemption / reduction to support enterprises policy 32 3.3.4 Effectiveness of Credit support policy from banking industry 33 Chapter 4: Policy recommendations in the “new normal” 34 MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM 4.1 Policy orientation 34 4.2 Short-term solution 34 4.3 Long-term solution 36 4.3.1 Solution for monetary policy 36 4.3.1.1 Solutions to help perfect monetary policy tools 36 4.3.1.2 Loosen the fluctuation band of exchange rate 37 4.3.1.3 The State Bank closely monitors economic developments and coordinates with the Ministry of Finance from information provision and exchange, planning to policy implementation 38 4.3.1.4 Enhancing the independence of the Central Bank 4.3.1.5 The State considers, researches towards testing and issuing Central Bank Digital Currency 4.3.2 Solution for the whole economy References 38 38 39 41 List of tables Figure Total number of cases of COVID-19 in Vietnam 17 Figure Quarterly GDP growth rate 19 MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM Figure The development of inflation and core inflation in economy 20 Figure Summary the Government budget revenue 21 Figure Summary the Government budget expenditure 22 Figure Situation of the impact of COVID19 to the performance of businesses 23 Figure Number of employees in 2020 compared to 2019 24 Figure 10 Vietnam GDP growth 29 Figure 11 Vietnamese Dong (VND) per US dollar (USD) 30 Figure 12 Inflation rate 30 MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM Introduction Money and Banking is a course on the economics of money, banking and financial markets The direction aims to grant the students a preface to the function of money, financial markets, financial institutions and monetary policy in the economy, therefore supplying a stable basis for further study or employment in the monetary offerings industry As economics students, we understand the importance of studying and researching Money and Banking The Money and Banking course will look at some crucial issues in the idea and exercise of monetary policy and how it influences the world Monetary policy is a central bank's actions and communications that manipulate the money supply It increases liquidity to produce profitable growth as well as reduces liquidity to prevent inflation The COVID-19 pandemic has spread fleetly across the world since December 2019 As of 26 October 2020, greater than 43.5 million COVID-19 confirmed cases have been reported, with nearly 1.2 million associated deaths Furthermore, according to WHO, Likewise, the number of verified cases is still increasing in numerous countries Despite COVID-19, Vietnam’s economy has remained flexible, increasing by 2.9 percent in 2020, which was one of the top growth rates in the world, and growth is projected to be 6.5 percent in 2021, thanks to robust profitable fundamentals, decisive containment measures and well-targeted authorities support, with accordance to the IMF’s latest annual evaluation of the country’s economy Using thorough disease surveillance data, this paper gives an overview of the unfolding of the COVID-19 pandemic in Vietnam and estimates the effectiveness of the Vietnamese reaction to contain the pandemic Therefore, our group has come to a decision of choosing this topic for our report:  “Monetary policy in response to the effects of Covid-19 in Vietnam” MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM In that context, the State Bank of Vietnam’s monetary policy management has faced many challenges while dealing with complicated changes caused by COVID-19 epidemic; they have to either recover the economy or control and stabilize the inflation and the macro economy Therefore, short-term solutions for monetary policy in response to unexpected developments of Covid-19 are of paramount importance According to Ms Victoria Kwakwam - World Bank’s Vice President in charge of East Asia - Pacific region highly appreciated the role of the State Bank in operating monetary policy proactively, flexibly, and implementing feasible solutions and programs to support businesses and people to overcome difficulties caused by the epidemic Thereby, making an important contribution to macroeconomic stability, growth support and social security assurance Firstly, the government should operate monetary policy flexibly, maintain system liquidity, synchronize monetary, credit and liquidity solutions to support economic recovery Closely monitor inflation developments and domestic and foreign markets to prepare an operating plan (taking into account the policy lag) if inflation rises faster than expected Second, the government should provide a prompt reaction to the proliferation of coronavirus by publishing documents requiring governmental agencies to analyse the level of impact of the COVID-19 wave on customers and create a plan on supporting and remedying customers’ issues Along with that, the State Bank of Vietnam should direct credit institutions to improve internal processes, reduce unnecessary paperworks and procedures, and promote the application of technology in credit appraisal; maximum savings, creating favorable conditions for a sharp reduction in lending interest rates Thirdly, reducing interest rates and providing a large source of money to the economy is a viable short-term solution Additionally, the government can issue 35 MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM policies to stimulate the rescheduling of debt repayment, exemption and reduction of loan interest in order to support businesses and people affected by the Covid-19 epidemic As a result, the sharp reduction in lending interest rates has partly supported Vietnamese enterprises to overcome the difficult period and maintain production and business Finally, the State Bank of Vietnam should set the fixed exchange rate in accordance with domestic and foreign market movements, macroeconomic balance and monetary policy objectives, limiting speculation, hoarding foreign currency and supporting the economy to adjust with the external shocks To specify, at the end of March 2020, in the context of rapid and complicated changes in the world economy and finance due to the impact of the Covid-19 pandemic, the market sentiment was negatively affected at times, the State Bank of Vietnam flexibly adjusted the intervening selling rate, communicated and was ready to intervene in the foreign currency market to stabilize the market As a result, the exchange rate on the interbank market tended to decrease gradually around the buying price of the State Bank of Vietnam 4.3 Long-term solution 4.3.1 Solution for monetary policy Monetary policy plays a leading role in the development of the economy Therefore, in the long-term future, when Vietnam overcomes the Covid-19 pandemic and enters the stage of recovery and development, the first urgent need is to improve the effectiveness of monetary policy Based on the existing theory and research, our group proposes some following solutions: 4.3.1.1 Solutions to help perfect monetary policy tools In order to improve the effectiveness of the monetary policy implementation process, it is necessary to quickly perfect the tools of the monetary policy in order to more closely follow the reality of the Vietnamese economy These tools need to be built and perfected in a way that supports each other and works together to avoid the situation that these tools cancel each other out Moreover, the state needs to persevere 36 MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM with the policy of using market-oriented monetary policy tools, so that the market can regulate economic activities To so: + It is necessary to monitor and closely follow market movements in order to have an adjustment of the basic interest rate and appropriate margin so that the basic interest rate can really act as a signal to regulate market interest rates + Maintain and gradually reduce the difference between interest rates in domestic and foreign currencies, gradually moving towards limiting the phenomenon of "dollarization" of the economy + Promoting the process of creating goods for the open market: increasing the issuance of bills, treasury bonds, and issuance of State Bank bills + Developing other related markets such as interbank market and secondary market 4.3.1.2 Loosen the fluctuation band of exchange rate According to Mundell-Fleming's theory, when an economy implements an exchange rate policy towards complete fixation, fiscal policy will yield the best results As for Vietnam, we implicitly understand that "rate" here is the exchange rate between VND and USD Vietnam's exchange rate was previously a managed floating exchange rate regime, that is, an exchange rate regime that the State Bank predetermined a range of fluctuations, when the exchange rate exceeds that range, the State Bank of Vietnam The country will intervene to keep it within the allowable fluctuation range One reason why Vietnam's monetary policy has not been effective is because of the managed floating exchange rate regime, with a large margin The range is very narrow (±1%) that the State Bank of Vietnam is applying for It is this that makes it difficult for monetary policy tools to pursue intermediate goals such as changes in the aggregate money supply (M2) because it will affect 37 MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM exchange rates and thus the Bank The state must take an opposite action to stabilize the exchange rate 4.3.1.3 The State Bank closely monitors economic developments and coordinates with the Ministry of Finance from information provision and exchange, planning to policy implementation The State Bank needs to closely monitor macroeconomic and monetary market developments in the country and the world, as a basis to promptly propose solutions to manage monetary policy, in close coordination fiscal policy and other macroeconomic policies to stabilize the value of money, contribute to stabilizing the macro-economy, control inflation, and promote economic growth according to the set targets 4.3.1.4 Enhancing the independence of the Central Bank Based on the empirical evidence of Alesina and Summers (1993), Cukierman, Webb and Neyapti (1992), Debelle and Fischer (1994) as well as economic theories have shown that, in a market economy, to the Central Bank manages monetary policy effectively, the independence of the Central Bank is a key factor In our country, since its establishment until now, the State Bank (SBV) is an agency of the Government, subject to the administrative intervention of the Government Therefore, the authority of the State Bank in formulating and operating monetary policy is still limited, and the degree of independence of the SBV is still relatively low This independence in recent years has been somewhat improved, but it is still not high, making the operation of monetary policy sometimes confusing, the effectiveness of monetary policy is not as expected Therefore, enhancing the independence of the central bank is essential 4.3.1.5 The State considers, researches towards testing and issuing Central Bank Digital Currency As People’s Bank of China (PBOC) points out, CBDC increases the ability to collect real-time data such as the issuance, bookkeeping and circulation of money, contributing to the power of monetary policy tools and aiding decision-makers; as 38 MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM well as enhancing prevention of money laundering, terrorist financing and tax evasion through big data center operations and the fact that more than 60 central banks are preparing to issue digital currencies, CBDC is expected to have a positive influence on monetary policy In Vietnam, Decision No 942/QD-TTg dated June 15, 2021, the Government assigned the State Bank to study, build and pilot the use of digital currency based on blockchain technology, this poses a prospect contribute to improving the efficiency of monetary policy management to promote the economy However, this is a new and risky field, SBV needs to carefully study the domestic situation and refer to the experience of previous countries to be able to make effective use of CBDC in the future 4.3.2 Solution for the whole economy Besides solutions for monetary policy, the economy will not be able to recover sustainably without the contribution of fiscal, social policies and so on Our team would like to propose some common long-term solutions that the Government can apply to prepare for sustainable development after the pandemic + Research and develop automated response processes for emergencies with qualitative and quantitative thresholds that can be "triggered", deployed immediately in the event of a crisis, pandemic or other disaster + Focusing on strongly developing   the   domestic   market, effectively implementing solutions to stimulate domestic consumption, focusing on stimulating demand in a number of industries and fields such as tourism, retail, transportation, accommodation and catering + Innovating the growth model in the direction of technology  -innovating, taking a risk-taking mindset and encouraging entrepreneurship + Focusing on solutions to promote the development of the private economy, digital  economy,  green  economy, support businesses and cooperatives to speed up digital transformation, business model innovation and technology innovation Accelerating the implementation of the National Digital Transformation Program to 2025, with orientations to 2030 and the National Strategy on developing Vietnam's digital technology enterprises to 2030 39 MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM + Develop high-quality human resources through comprehensive reform of the education system, renovating the training program towards increasing practice; development of multi skill competency; strengthening connection between training institutions and the market and encouraging large enterprises to invest in education through public-private partnerships + Urgently perfect  institutions, build  a  State  of  creation,  development, integrity and action Respect and protect equality among economic sectors, develop the private economy, strengthen business linkage 40 MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM References  Bàn sở lý luận sách điều tiết kinh tế vĩ mô điều kiện khủng hoảng kinh tế , TS Đỗ Văn Đức www.sbv.gov.vn Sự độc lập Ngân hàng Trung ương số gợi ý sách cho Việt Nam, ThS Nguyễn Hương Giang www.sbv.gov.vn Central Bank Credibility, Independence, and Monetary Policy, Abdelkader Aguir, Journal of Central Banking Theory and Practice, 2018, 3, pp 91-110, https://sciendo.com/pdf/10.2478/jcbtp-2018-0025 CBDC and Monetary Policy  , Mohammad Davoodalhosseini, Francisco Rivadeneyra, Yu Zhu, February 2020 https://www.bankofcanada.ca/2020/02/staff-analytical-note-2020-4/ The Benefits and Costs of a Central Bank Digital Currency for Monetary Policy https://bpi.com/the-benefits-and-costs-of-a-central-bank-digital-currency-formonetary-policy/ Nhìn lại 35 năm đổi sách tiền tệ hoạt động hệ thống ngân hàng Việt Nam, Nguyễn Đức Long, Tạp chí Ngân hàng số Chuyên đề đặc biệt 2021 http://tapchinganhang.gov.vn/nhin-lai-35-nam-doi-moi-chinh-sach-tien-te-vahoat-dong-cua-he-thong-ngan-hang-viet-nam.htm Điều hành sách tiền tệ linh hoạt hỗ trợ kinh tế phát triển, Nguyễn Đức Trung, Lữ Hữu Chí, Trần Việt Dũng - Trường Đại học Ngân hàng TP Hồ Chí Minh, Bài đăng Tạp chí Tài kỳ tháng 7/2021 https://tapchitaichinh.vn/ngan-hang/dieu-hanh-chinh-sach-tien-te-linh-hoat-hotro-nen-kinh-te-phat-trien-336600.html 41 MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM MONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAMMONEY.AND.BANKING.ESSAY.MONETARY.POLICY.IN.RESPONSE.TO.EFFECTS.OF.COVID.19.IN.VIETNAM