Truyền dẫn chính sách tiền tệ tại việt nam astract english

1 INTRODUCTION THE SIGNIFICANCE OF RESEARCH Theoretical and experimental transmission of monetary policy Monetary policy is one of the most important economic policy of the national economy Actions of monetary policy (Practiacal study and application) seeks to three goals that is growth, inflation and employment Monetary policy is the central bank of the country in the world to reg`ulate the operating cash flow Bernanke and Gertler (1995) suggests that the effects of monetary policy through interest rate policy to influence market interest rates through lending and deposit operations, however, the different through stages of economy Interest rate and exchange rate channel is more policy makers choose to run monetary policy to affect the real sector of the economy (Kuttner and Mosser (2002) and Clinton and Engert (2000), Ibrahim, M (2005) Besides the traditional channels, mechanism of monetary policy is transmitted through various channels such as the credit channel, asset price channel According to Christina D Romer and David H Romer (1993) the act of monetary policy through the credit channel in two ways Firstly, the tightening of monetary policy through interest rate tool will make all kinds of interest rate increases Secondly, the actions of monetary policy can directly affect the availability of financing types lenders Vietnam's economic situation Before the global financial crisis of 2008, the domestic economic situation complicated, especially in the period from 2000 to 2005 Although economic growth in this period quite stable at 6.79% in 2000 to 8.44% in 2005 while inflation rose from 2% in 2000 to 8% in 2005 The average credit growth of 21%/ year in the period 2000 and 2001 to 41.5% increased in 2004 Under the influence credit growth together with the development of the stock market have made the economy the highest growth in this period is 8.44% in 2005 After the financial crisis of 2008, the economic situation is unstable fluctuations, inflation complicated fluctuations, to 28.32% highest in 8/2008 Growth is maintain low, 6.31% in 2008, 5.12% in 2012 and 5.89% in 2014 Mechanism of monetary policy operating in Vietnam Interest rate policy State Bank operated through interest rate refinancing, refinancing interest rate from 2001 to 2008 ranged from 4.8% to 7.5% The period 2008 to 2009, interest rates are constantly changing, the highest is 15% and the lowest was 7% The period 2010 to 2013, interest rates continued volatile changes, in 2010 the interest rate is 7% but to 2012 refinancing interest rate increases to 15% then fell to 6.5% in 2014 Exchange rate regime Abolish the official exchange rate instead of floating exchange rates associated amplitude State Bank to change the amplitude of each specific phase USD / VND increase from 2001 to the present: the exchange rate in 12/2001 is 15,069, monthly 7/2006 is16,008 and monthly 5/2014 is that 21,195 Credit policy Depending on the stage of economic development in particular, the State Bank of Vietnam issued credit policy different each Credit tightening policy making credit growth dropped to 21.4% in 2006, while growth remained at around 8% In 2007, the year in which the stock market has grown excessively as investment demand for the stock to rise High profitability of stock market growth has increased to 53.89% credit, the highest level in the decade Other policies NHNN (the State Bank of Vietnam)dated 26/07/2013 Vietnam launches debt trading company (VAMC) in order to clear the credit to commercial banks in Vietnam Also previously dated 06/01/2013 Vietnam State Bank loan package offering support social housing together with other policies Experimental researches in Vietnam Last time(Previously), many studies on policy and the monetary policy transmission in Vietnam, the study has made certain achievements and approaches of the different researhes Le Viet Hung and Wade Pfau (2008), Nguyen Phi Lan (2010), Tran Ngoc Tho and Nguyen Huu Tuan (2013), Nguyen Khac Quoc Bao (2013), Bach Thi Phuong Thao (2011), Nguyen Thi Ngoc Trang and Luc Van Cuong (2012), Pham Thi Tuyet Trinh (2013), Dinh Thi Thu Hong and Phan Dinh Manh (2013 These researches have studied separation between the channels through different stages, not aggregate the in the transmission channel These reasons on choosing the topic "Transmission mechanism of monetary policy in Viet Nam" is extremely urgent The research project aims to overcome the limited points of the previous research contract time finding new points relating to the transmission mechanism of monetary policy in Vietnam THE GAPS OF RESEARCH - There are many studies of monetary policy transmission in the word, but very few studies of transmission of monetary policy for developing countries and countries with emerging economies such as Vietnam - In Vietnam there have been some studies of monetary policy transmission, but only stopped in the study probably every single transmission channel, no combination of transmission channels in determining the extent effectiveness of each channel - There aren’t study to determine the relationship between policy rates and lending rates, between policy rates and credit - There aren’t study to discuss the Vietnam State Bank interest rate policy implemented in the relationship between changes in inflation and economic growth RESEARCH SUBJECTS Based on research gaps, thesis research subjects related to policy transmission mechanism in Vietnam through the transmission channel as the interest rate channel, exchange rate channel and the credit channel In addition, since the impact of the channel to the final goal (growth and inflation) through intermediate variables should research the details of objects in the transmission mechanism such as money supply, stock price index securities, interest rates, import and export growth OBJECTIVES OF THE STUDY The objective of the thesis is to clarify the transmission mechanism of monetary policy in Vietnam through channels such as the interest rate channel, exchange rate channel and the credit channel to the ultimate goal is growth and inflation, from the that result may suggest that monetary policy more effective: - Simulation of the transmission channels of monetary policy in Vietnam include: interest rate channel, exchange rate channel and the credit channel, thereby determining the effective level of this channel - Analysis of transmission mechanisms in policy rates to lending rates of commercial banks in Vietnam and the scale of private credit The results of this analysis to help evaluate the effectiveness of interest rate transmission channel in Vietnam - Analysis of the factors affecting the decision to adjust policy interest rates in Vietnam, which determine the policy interest rate changes based on the target with the inflation or growth or not? - Proposal on measures aimed at increasing the effectiveness of monetary policy operating in Vietnam in the near future based on the research results achieved RESEARCH QUESTION To achieve the research objectives, research should (aim to) answer the following questions: - There exists the validity of such channels: the interest rate channel, exchange rate channel, the credit channel in the transmission mechanism of monetary policy in Vietnam or not? - The level of transmission from the tool to the intermediate target variable and final goals like? - Executive refinancing interest rate has to rely on changes in growth and inflation in Vietnam or not? - Transmission from policy rates to market rates has absolutely no? - The instrument variables, intermediate variables and target variables targets exist long term relationship or not? - There exists a causal relationship of the variables in the transmission mechanism of monetary policy in Vietnam or not? RESEARCH SCOPE Researching the monetary policy transmission in Vietnam through channels phase from 2001 to 2014 RESEARCH METHODS To achieve above goals, Author uses research methods: qualitative analysis and quantitative analysis methods Qualitative analysis method: Author used this method to analyze the situation of monetary policy operating through channels such as the interest rate channel, exchange rate channel and the credit channel Results situational analysis as a basis for building models of quantitative analysis Quantitative analysis method: - Using regression model by means of self-regression vector correlation VAR (vector auto regression) and structural VAR model (SVAR- Structural VAR) Using VAR method allows us to determine the interest rate shocks on economic variables Bernanke (1986), Sims (1986) and Blanchard and Watson (1986) - The analysis is based on the method of least squares (ordinary least squares: OLS) single equation dissertation help solve the second goal and third - Subject methods are combined with an examination on the link to review the long-term relationship of the channel to the other economic variables Also the author also uses testing methods to examine Granger causality relationship between the variables in the transmission channel and other economic variables MEANING OF SCIENCE AND PRACTICE OF THESIS - Formalized brief, complete theory of monetary policy transmission of famous economists in the world - Modeling the monetary policy transmission in Vietnam through channels such as the interest rate channel, exchange rate channel and the credit channel - Identify the relationship between interest rate policy run-interest loans, private credit growth, which also recognizes the right to decide to change the policy rates to market rates and increased credit growth - Determine the correlation between interest rate policy to inflation and economic growth in the real economy in Vietnam recently - Topic determine the changes of target variables (growth, inflation) in the transmission mechanism of monetary policy shocks from the variable component tools (refinancing interest rate, exchange rate, credit), before the shock of the intermediate variables (money supply, interest rate, stock price index, export and import) and vice versa - Define a long-term relationship between the variables representing the transmission channel (refinancing interest rate, exchange rate and credit) to the intermediate variables (money supply, interest rates, exports and imports) and target variables (growth, inflation) through analysis linked contracts Also new search was the subject of causality between the instrumental variables, intermediate variables and the target variable transmission mechanism of monetary policy in Vietnam NEW POINTS OF THESIS - Research aggregate channels in the transmission mechanism of monetary policy in Vietnam, which shows the validity of each channel in the operating mechanism monetary policy of the Central Bank in Vietnam - Through the transmission channel, thesis tested the impact of the tool variable to the intermediate target variables, thus helping to identify intermediate objectives in the transmission mechanism of the channel to the final goal hard - Thesis verify how the central bank to adjust interest rate policy in the relationship between inflation and economic growth, which in turn can help to identify the correct target the central bank in managing monetary policy through interest rate channel productivity - Thesis also determines the extent of the impact of policy rates to lending rates, private credit growth, which makes the central bank clearly oriented transmission mechanism from policy interest rates to lending interest rates, an important contribution to regulate credit growth, contributed to curbing inflation and boosting economic growth STRUCTURE OF THESIS The structure of thesis is divided into chapters as follows: Introduction Chapter 1: Theoretical foundations and research overview of transmission of monetary policy Chapter 2: The situation of monetary policy operating Vietnam between 2001 and 2014 Chapter 3: Methodology of Research Chapter 4: Findings and discussion Chapter 5: Conclusions and suggested solutions CHAPTER THEORETICAL FOUNDATIONS AND RESEARCH OVERVIEW OF TRANSMISSION OF MONETARY POLICY 1.1 OBJECTIVES OF MONETARY POLICY In each period certain economic, with the combination of methods impact on the volume of money in circulation, monetary policy to set specific targets In the monetary policy is usually types of goals: Operational objectives, intermediate objectives and ultimate goals 1.1.1 The ultimate goals According to Mishkin (2010), monetary policy to be achieved ultimate objectives is creating jobs, economic growth, stable prices, stable interest rates, stable financial markets and stabilize the foreign exchange market 1.1.2 Intermediate goals Intermediate goals of monetary policy including criteria are central banks select in order to achieve the ultimate goals of monetary policy The intermediate goals is usually the central bank of country in the world used is market interest rates, money supply or credit, hence the need to achieve the ultimate goals concerning GDP 1.1.3 Operational objectives Operational objectives have organic relationships with intermediate goals, intermediate goals are the result of operational objectives So the selection of the operational objectives are important, operational objectives are central banks that use shortterm interest rates, reserve requirements and open market 1.2 THEORY TRANSMISSION OF MONETARY POLICY 1.2.1 Transmission of monetary policy 1.2.1.1 The process of development of the theory of monetary policy transmission The 1930s, Smith and Ricardo, Fisher, Marshal and Pigou, John Keyness has studied the transmission of monetary policy through rate of cash flow Hicks (1937), for the first time outlined the relationship between interest rates and money by using the IS-LM model, Melzter (1995) sum up the above theory Friedman (1965) confirmed the increase in fiscal spending and money supply contributed to increased inflation Brunner and Meltzer (1972) fiscal policy may also affect the transmission of monetary policy Lucas (1972) stated that monetary policy is ineffective if the market reaches equilibrium Sargent and Wallace Lucas (1976) applicated theory’ Lucas and said that the expected money supply shock has no effect on real economic activity Kydland and Prescott (1982) explain the change in the economy from the expectations of the shock from the real sector as technology shocks, oil prices and bad weather But Friedman (1986) argues this idea by arguing that a reasonable expectation ignores several important variables such as capital and wealth in the analysis of transmission mechanisms Mankiw (1989) analysis of prices and wages from a grassroots perspective on competitive micro information completely and perfectly Stiglitz and Weiss (1981) argued that the risk of unwanted and unidentified in the elasticity of interest rates led to changes in the economy In addition, a number of articles using micro base to demonstrate the interaction of financial markets affect the real parts of the economy (Bernanke, 1983; Eckstein and Sinai, 1986; Hamilton, 1987) Summary, the transmission mechanism of monetary policy can be divided into two perspectives: Firstly, is the view of currencies, including interest rates, exchange rates and asset prices; Secondly, is the view of credit, including bank credit and asset balance channel 1.2.1.2 The concept of transmission mechanism of monetary policy Transmission mechanism of monetary policy is defined as the process of implementing the monetary policy decision making changes in the money supply or interest rates affect macroeconomic variables of the economy Especially the change of monetary policy through the channels of influencing the ultimate goal is growth and inflation (John B Taylor 1995), Minskin, F S., 1996) Meltzer (1995) said that the key in the transmission mechanism of monetary policy is to reconcile long-term factors and shortterm factors of macroeconomic variables 1.2.2 The transmission channels of monetary policy 1.2.2.1 Interest rate channel Interest rates are one of the tools of monetary policy, is the most important tool the central bank uses to execute the monetary policy in order to influence the money supply in the economy, thereby affecting the variables other macro In the economic model of the famous economist John Keyness, interest rate transmission channel to economic growth through the following process: Money Suply decrease  Interest Rate increase  Investment descrease  Yields descrease Interest rates affect investment: interest rate is the cost of inputs of capital flows should significantly impact business results of investment entities in the economy A change in interest rates greatly influence investment decisions Interest rate decrease  Investment increase Yields increase Interest rates affect consumers: Once interest rates fall, the majority of household financial savings feel your low interest generated individual that does not want to send more consumers switched from there increase demand in the short term Policy interest rate decreaseMarket interest rate decreaseConsume increaseCPI increase Interest rates affect the exchange rate: The interest rate parity theory of Fisher a change in interest rates has an impact on the exchange rate Interest rates affect the stock price index Transmission mechanism related to the stock price impact: (i) investment; (Ii) the balance of the assets of the enterprise) and (iii) the wealth of households Interest rates affecting real estate prices Property prices affect aggregate demand through the channels: (i) a direct impact on housing expenses; (Ii) household wealth; (Iii) bank balance sheets 1.2.2.2 Exchange rate channel Exchange rate is one of the important tools in conducting monetary policy, also is an important transmission channel for the transmission of related policies including price through exchange rate changes to elements prices in the economy, such as import prices, producer prices, consumer prices, real estate prices, stock price index Impact on net exports When exchange rate changes affecting import and export situation in the country, the exchange rate increase mean domestic currency devaluation, this made domestic commodity prices cheaper than international According to Mishkin (1995), the impact of monetary policy through the exchange rate channel is shown in the following order: Money supply descrease Interest rate increase Exchange rate decreaseNet expor decrease  Yield decrease Impact on balance sheet assets The exchange rate impact on balance sheet assets, particularly affecting the multi-national company, the investment company directly into the water Exchange rate increases make calculated value of foreign currency assets decreased, reducing borrowing needs Exchange rate increaseNet asset value decreaseLoans descreaseInvestment decreaseYields decrease Taylor (1995) emphasized the importance of the international environment, based on flexible exchange rate policy, a change in exchange rates may affect the parts of the economy In order to maintain a fixed exchange rate regime, the Government must intervene in the market by selling more local currency, thus the effects of monetary policy tightening is weak (Obstfeld and Rogoff, 1995) Impact on credit operations Exchange rate impact channel borrowing through interest rates, domestic interest rates tend to increase, rising interest rates make the amount of foreign currency into the country more Impact on investment activity The exchange rate impact on investment activity through financial flows between countries Impact on the consumer price index The developed countries have a stable monetary policy, the correlation between the exchange rate and consumer price index is usually lower (Miskin, 2008) This observation is consistent with a study by (Rebelo, 2007, Gagnon, 2004; Goldfanajn and Werlang, 2000) Gagnon and Ihrig (2004) suggest that the correlation between the exchange rate and inflation McCarthy (2004), found that a reduction in the exchange rate impact on inflation for the major industrial countries The exchange rate impact on the producer price index (PPI) The exchange rate impact on the producer price index by the import price, the exchange rate impact on import prices in the country from which the impact on prices of inputs in the production of such material, labor and science and technology factors Money Supply decreaseExchange rate increaseImport price increaseProducer price increaseYields decrease McCarthy (2000) studied the effect exchange rate policy and import prices on producer price index and consumer price index for the nine industrialized countries have concluded that exchange rate changes have a strong impact on the index domestic prices as CPI and PPI Impact on Stock Price Index Phylaktis and Ravazzolo (2000) and Woo (2000) provide evidence on the relationship between exchange rates and stock markets Joseph (2002), Vygodina (2006), studying the relationship between the exchange rate and the stock price index Tulin Anlas (2012) studied the relationship between the exchange rate between the US dollar and Canadian dollar with the stock price index ISE 100 1.2.2.3 Credit channel Monetary policy transmission is performed according to the diagram on Bayyoumi and Melader (2008) are similar to Bernanke's research and Gertler (1995) Through lending channel, the impact of monetary policy transmission are as follows: Money supply increase Bank deposits increase Bank loans increase Investment increase Yeilds increase Or through the interest rate Money supply decrease Interest rate increase Bank loans decrease Investment decrease Yeilds decrease Credit affects consumers and consumer price index Credit and impact on consumer price index through the following diagram: Reserve requirement decrease M2 increase Market interest rate decrease  Loans increase  Consumers increase Prices increase CPI increase (Miskin, 1995) Or Rediscount interest rate decrease  Market interest rate decrease  Loans increase  Consumer increase Price increase CPI increase Credit and investment impact on economic growth Money supply increase Interest rate decrease Bank loans increase Investment increase Yields increase Credit impact on the stock price index Money supply increase Interest rate decrease Credit increase Investment increase Stock price index increase Credit impact on the stock price index through investment decisions on the stock market Credit easing policy to stimulate investment through the stock channel, credit easing policy through attractive interest rates has made investors more because this is an opportunity for investors to be able to mobilize low cost capital sources Credit affects real estate prices Credit and property prices have bidirectional relationship, one side contributing credit real estate market, changes in credit policy easing will lead to the real estate market increased, so that real estate prices rising (Chun Tsai, 2010) 1.2.2.4 Asset price channel Property prices are seen as factors assessed the wealth of enterprises and households So monetary policy changes that could significantly impact the increase or decrease of the assets through price or a manifestation of the price In 1933 after the world economic crisis, economists Fisher gave finding that the decrease in the stock price could be the cause of the economic crisis Later (de Leeuw and Gram-lich, 1969) research indicates that the channel properties are viewed as a transmission channel for monetary policy 1.3 OVERVIEW OF PREVIOUS STUDIES RELATED TO MONETARY POLICY MANUAL TRANSMISSION 1.3.1 Overview of the research in the world Tobin (1963), Tobin (1970), Lucas (1972), Eugene Fama (1980), Blinder Stiglit (1983), King, R G., & Plosser, C I (1984), Bernanke (1986), Bernanke and Blinder (1992), Morsink Bayoumi (2001), Al-Mashat (2003), Disyatat and Vongsinsirikul (2003), Ramlogan (2004), Elbourne, Haanb (2006), Al-Mashat Billmeier (2007), Mala Raghavan Param Silvapulle (2007), Amarasekara (2008), Bayangos (2010), Kabundi and Nonhlanhla (2011), Ncube and Ndou (2011), Mohanty Turner (2008), Mukherjee and Bhattacharya (2011), Acosta-Ormaechea and Coble (2011) Mishra and el (2010), Bhattacharya and el (2011), Łyziak T., Przystupa J., and Wróbel E (2008), Benkovskis (2008), Jimborean (2009), Egert and Macdonald (2006), Atif Ali Jaffri (2010), Abdul Aleem (2010), Rokon Bhuiyan, Deepak Mohanty (2012), Vasile COCRIŞ & Anca Elena NUCU (2013) 1.3.2 Overview of domestic research In Vietnam, the study of monetary policy have long, however quantitative research on the transmission of monetary policy is only implemented in recent years The researchers studied the transmission of monetary policy through channels such as interest rates, exchange rates, asset price channel The results of the study have solved a certain number of objectives related to the transmission mechanism of monetary policy in Vietnam: Le Viet Hung Wade D Pfau & (2008), Nguyen Phi Lan (2010), Nguyen Thi Ngoc Trang and Luc Van Cuong (2012), Tran Ngoc Tho et al (2013), Nguyen Khac Quoc Bao (2013), Pham Thi Tuyet Trinh (2013), Zhou Khanh Lan (2013), Nguyen Phuc Landscape (2014) Conclusion Chapter The process of development of the theory of monetary policy transmission to the impact on the economy through various transmission channels Monetary policy through interest rate policy, exchange rate policy impacts directly and indirectly through intermediate target to the ultimate goal Many studies indicate that transmission through multiple channels, achieve monetary policy objectives depend on the operation of the tool fit each period of economic development The study also pointed out that the interest rate channel is the most important channel, followed by the exchange rate channel, the credit channel and asset price channel The transmission channel relationship interrelated and impact on growth and inflation CHAPTER STATE OF MONETARY POLICY OF VIETNAM 2.1 MONETARY POLICY THROUGH THE INTEREST RATE 2.1.1 Operations Phase interest rate policy before 2005 Fixed interest rate policy This interest rate policy in the State Bank of Vietnam (SBV) implementation period January 1989 until 5/1992 Under this mechanism, the central bank intervence direct and a high level of interest in giving through the base rate and fixed directly on deposit rates and lending rates applicable to sender money and borrowers Implementing this mechanism makes the negative real interest rates, and this is the stage heavily subsidized properties as lending rates for State Enterprises (SOE) is lower than for nonstate enterprises, interest rates sometimes lower nominal rate of inflation, short-term lending rates higher than long-term lending rates Policy interest rates under the frame This policy is implemented 6/1992 month period to 1995 The content of this policy is the interest rate the central bank operating under the frame rate, which is clearly stipulated interest rate floor and ceiling lending rates for actors in the economy Commercial banks (CBs) and credit institutions (CIs) based on the framework of the central bank interest rates to take out the appropriate interest rate Policy ceiling interest rate This policy was implemented in 1996 the central bank to March 7/2000 This policy has changed a step the central bank that is to remove the floor instead applies only ceiling interest rate This mechanism was initially liberalize deposit rates and lending rates controlled by taking the cap lending rates SBV sets a ceiling lending interest rate for the term of the debt at the same time control the spread between deposit rates and lending rates not exceeding 0.35% of the / month, or 4.2% / year Period before interest applied by commercial banks should fire upon this mechanism has overcome most of the banks have a high profit margin, while businesses have difficulty in finance Basic interest rate policy band together Operating mechanism base rate is implemented in the period January to March 5/2002 8/2000 This mechanism is applicable statutory interest rate the central bank to replace the mechanism of ceiling interest rate Starting May 8/2000, the central bank launched a new mechanism in which the interest rate lending rates in local currency adjusted follow base rate by the central bank offering However, commercial banks are not calculated lending rate exceeds 0.3% / month for short-term loans and 0.5% / month for medium and long term loans Agreed interest rate policy This interest rate mechanism is the state bank launched to apply in the period from 6/2002 to 05/2005 The decision was issued on 06/01/2002, this is a big change enables banks and credit institutions more active in deciding interest rate input and interest rate output 2.1.2 Operating phase of interest rate policy in 2005 so far Interest rate management under Article 476 of the Civil Code 2005 After many years, from 2002 to 2007 Vietnam's growth was higher than 7% / year, reaching 8.46% in 2007 However, inflation remains high on the double-digit 12.6% in 2007 due to easing monetary policy, fiscal policy and inefficient public investment Budget deficit from 2001 to 2007 on average 4.95% / GDP Entering 2008 the Vietnamese economy is not only facing unpredictable world economy, but also faces many internal difficulties such as inflation increased (from 9.3% 10/2007 to 8/2008 28.32%), trade deficit reached a record of more than 14% of GDP, the stock markets were difficult to witness the VN-index fell sharply and continuously for several months (from 1,065 points 10/2007 to 8/2008 539 points) Chart 2.1: Basic interest rate period 2000-2008 LSCB 015% 010% 005% 000% LSCB In 2009 according to Decision No 172 / QD-NHNN dated 23/01/2009 continue to implement loose monetary policies adopted by the applicable cuts interest rate on the day 02.01.2009, Special Interest basic rate decreased from 8.5% further to 7% / year, reduced the refinancing rate to 7% / year, the discount rate reduced to 6% / year, interest rates open market operation to 7% /year Along with the change of the basic interest rate, the goal is to develop the money market according to the market mechanism SBV has in turn made the circulars (03/2010-TT-NHNN, 07/2010-TT-NHNN, 12/2010-TT-NHNN) allows banks and credit institutions to borrowers at an interest rate agreement Table 2.1: The average interest rate banks in 2010 Date 1month 3months 6months 9months 12months 24months 36months 31/12/2009 10,29% 10,35% 10,37% 10,36% 10,37% 10,39% 10,38% 30/06/2010 11,19% 11,38% 11,47% 11,47% 11,51% 11,32% 11,32% 21/12/2010 13,68% 13,65% 13,34% 13,05% 13,38% 12,34% 12,35% Interest rate management agreements to market rates towards the management of the SBV In 2011 continues to be difficult for the domestic economy under pressure from the world economy Inflation continues to rise (from 12.7% to 20.85 6/2011 1/2011 month) while the stock market and real estate market plummeted Chart 2.2: The base interest rate, refinancing interest rate in 2010-2014 16% 14% 12% 10% 8% 6% 4% 2% 0% LSCV LSCB Interest refinancing state banks to adjust from 10% in 11/2012 dropped to 8% in 3/2013, on 18/03/2014 reduced to 6.5%, since then remained at this level 2.2 MONETARY POLICY THROUGH EXCHANGE RATE 2.2.1 Movements in the exchange rate and monetary policy management through the exchange rate channel phases before and after the world economic crisis of 2008 2.2.1.1 The period after the Asian financial crisis and before the world economic crisis in 2008 - On 26/02/1999: SBV decided to terminate the official exchange rate and the exchange rate fell to 0.1% - From 26/2/1999-30/6/2002: application of a 0.1% trading band - From the year 2002-2006: 0.25% margin is fixed, - Early 2007: exchange rate band widened: On 02/01/2007, the central bank widened the exchange rate of + 0.25% higher over the interbank rate 10 Chart 2.3: Exchange rate fluctuations period 1999-2008 18000 TG NHTM:USD/VNĐ 17000 16000 15000 13000 T9/1999 T7/2000 T7/2001 T8/2002 T9/2003 T11/2… T3/2005 T6/2005 T9/2005 T12/2… T3/2006 T6/2006 T9/2006 T12/2… T3/2007 T6/2007 T9/2007 T12/2… T3/2008 T6/2008 T9/2008 T12/2… 14000 Right from the beginning of 2007, the central bank decided to expand the fluctuation range, but the VND / USD was down, even the first months of the year, the share price falls 12:33% But the trade balance and current account balance deficits and inflation was 27.9% relatively large Chart 2.4: Exchange rates, exports and imports 100% 25000.0 080% 20000.0 060% 040% 15000.0 020% MIG 10000.0 -040% 2005M1 2005M9 2006M5 2007M1 2007M9 2008M5 2009M1 2009M9 2010M5 2011M1 2011M9 2012M5 2013M1 2013M9 2014M5 000% -020% MXG -060% EXU 5000.0 - From 10/2007 to 04/04/2008, especially after the central bank to loosen exchange rate fluctuation range from 0.75% to 1%, the nominal exchange rate of USD / VND decreased by 1.2% (VND rose), on 04/04/2008 exchange rate are $ = 15,960 VND Chart 2.5: Refinancing interest rate and exchange rate USD / VND 016% 014% 012% 010% 008% 006% 004% 002% 000% 25000.0 20000.0 15000.0 10000.0 IRD 5000.0 EXU 2005M1 2005M9 2006M5 2007M1 2007M9 2008M5 2009M1 2009M9 2010M5 2011M1 2011M9 2012M5 2013M1 2013M9 2014M5 - 2.2.2 The period after the world economic crisis so far First, the exchange rate and the average interbank exchange rate by listed banks always shown very little difference in the exchange rate band is too tight Second, the rate quoted by commercial banks are slithering announced upward trend (constant currency devaluation) adjacent to the average rate on the interbank Third, on the free market exchange rate of USD/VND always higher than the official rate, banks are using the amplitude allowed in the dollar price listed 18 4.1.3 Determining optimal lag Optimal lag is determined for SVAR model are summarized as follows: Table 4.3: Results optimal lag test Lag LogL LR FPE AIC SC HQ 1.198.526 NA 1.26e-15 -1.728.298 -1.715.571 -1.723.126 2.270.522 2.035.239 3.79e-22 -3.229.741 -31.40651* -3.193.537 2.331.583 1.106.176 2.64e-22* -32.66062* -3.100.608 -31.98825* 2.362.523 53.36039* 2.87e-22 -3.258.728 -3.016.912 -3.160.460 2.383.020 3.356.762 3.64e-22 -3.236.260 -2.918.081 -3.106.960 2.403.351 3.152.880 4.67e-22 -3.213.553 -2.819.010 -3.053.220 2.431.965 4.188.328 5.37e-22 -3.202.847 -2.731.941 -3.011.483 2.457.882 3.568.353 6.53e-22 -3.188.235 -2.640.966 -2.965.838 2.490.059 4.150.311 7.36e-22 -3.182.694 -2.559.061 -2.929.265 2.530.973 4.921.627 7.48e-22 -3.189.817 -2.489.821 -2.905.356 10 2.568.155 4.149.225 8.22e-22 -3.191.529 -2.415.170 -2.876.036 11 2.603.993 3.687.745 9.51e-22 -3.191.295 -2.338.573 -2.844.770 12 2.649.131 4.252.105 9.99e-22 -3.204.538 -2.275.453 -2.826.981 4.2 RESULT OF REASEARCH 4.2.1 The result of SVAR model frame format 4.2.1.1 The result estimates According to the table 4.3 model test option optimal latency is 2, the results of testing are summarized as follows: Independent variable Table 4.4 : Results SVAR model estimation frame format (Equation 17) Dependent variable CPI_SA M2_SA IPG_SA 0,162** 0,222 0,246*** -1,225*** 0,163 24% IPG_SA CPI_SA M2_SA IRD_SA C R2 -0,599* 0,13* -0,059*** -0,01 98% IRD_SA -0,2** 0,055*** 0,005 94% -0,14** 0,0014 96% * (**), (***) statistically significant level 1%, 5% 10% Based on estimated results Table 4.4 we see industrial output value is affected by itself, affect the same way with the money supply and the impact inversely to interest rates of refinancing This result is similar to findings by Oyaromade (2006), Philip Ifeakachukwu (2012) when studying the transmission of monetary policy in developing countries, Nigeria 4.2.1.2 Analysis impulse response pattern frame format Response of growth in industrial output value (IPGt) and inflation (CPIT) before the shock of oil prices (OILt) Chart 4.1: Response of IPGt, CPIt to Cholesky One S.D OILt Response of IPG_SA to Cholesky One S.D OIL_SA Innovation Response of CPI_SA to Cholesky One S.D OIL_SA Innovation 016 016 012 012 008 004 008 000 004 -.004 -.008 000 -.012 -.004 -.016 -.020 -.008 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 19 - Shock of OILt immediate strong impact on the growth of industrial output value, slow impact on inflation, similar to the results of Jeevan Kumar Khundrakpam research and Rajeev Jain (2012) Response of growth in industrial output value (IPGt) and inflation (CPIt) before the shock of the Fed's interest rate policy (IRUt ) Chart 4.2: Response of IPGt and CPIt to Cholesky One S.D IRDt Response of CPI_SA to Cholesky One S.D IRU_SA Innovation Response of IPG_SA to Cholesky One S.D IRU_SA Innovation 025 008 020 006 015 004 010 002 005 000 000 -.002 -.005 -.004 -.010 -.006 -.008 -.015 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 20 22 24 - When the Fed increases interest rates, growth in output value in Vietnam increased and prolonged - Slow response of the CPI before Fed interest rate shocks Response of growth and inflation before the shock of the policy interest rate Hình 4.3: Response of IPGt CPIt to Cholesky One S.D IRDt Response of IPG_SA to Cholesky One S.D IRD_SA Innovation Response of CPI_SA to Cholesky One S.D IRD_SA Innovation 020 008 016 006 012 004 008 002 004 000 000 -.002 -.004 -.004 -.008 -.012 -.006 10 12 14 16 18 20 22 24 10 12 14 16 18 - Growth of industrial output value of hard and fast response before the shock of refinancing interest rates - The response of slow and weak CPI before the shock of the refinancing interest rate Response of the money supply before the shock of interest rate policy Chart 4.4: Response of M2t to Cholesky One S.D IRDt Response of M2_SA to Cholesky One S.D IRD_SA Innovation 012 008 004 000 -.004 -.008 10 12 14 16 18 20 22 24 - The response of slower money supply almost three months before the shock of interest rate policy, and then increase slowly 20 Response of growth and inflation CPIT IPGt before the shock of the money supply Chart 4.5: Response of IPGt and CPIt to Cholesky One S.D M2t Response of CPI_SA to Cholesky One S.D M2_SA Innovation Response of IPG_SA to Cholesky One S.D M2_SA Innovation 025 012 008 020 004 015 000 -.004 010 -.008 005 -.012 000 -.016 -.005 -.020 -.010 -.024 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 4.2.1.3 Analysis of variance decomposition model frame format - In short IPGt affected by external factors such as price, interest rates - In the short term, inflation sharp change of representative before changing external prices is the price of oil (OILt), then to the money supply, interest rates and ultimately Fed lending rates - In the short-term money supply is affected strongly by the growth of industrial output value and prices outside 4.2.2 Transmission channel of monetary policy interest rates in Vietnam 4.2.2.1 Model structure and format Interest rate channel is one of the transmission channels that the central bank seeks to when operating monetary policy, particularly the impact transmission corridor from policy rates to market rates (interest rates, deposit interest rates, the average interest rate interbank ) Model 1: Model no stock price index VNIt Yt= f(IPGt, CPIt, M2t,IRLt, IRDt)’ Model 2: Model of the stock price index VNIt Yt= f(IPGt, CPIt,VNIt, M2t,IRLt, IRDt)’ 4.2.2.2 Impulse Response Analysis Response of growth (IPGt) and inflation (CPIt) before the shock of lending rates (IRLt) Chart 4.6: Response of IPGt and CPIt to Cholesky One S.D IRLt Response of IPG_SA to Cholesky One S.D IRL_SA Innovation Response of CPI_SA to Cholesky One S.D IRL_SA Innovation 020 015 015 010 010 005 005 000 000 -.005 -.005 -.010 -.015 -.010 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 - When lending rate increased by unit standard deviation instantly industrial production value increase and the strongest - Inflation also accelerated response before changes in lending rates, then subside Response of the money supply (M2t) before changes in lending rates (IRLt) Chart 4.7: Response of M2t to Cholesky One S.D IRLt Response of M2_SA to Cholesky One S.D IRL_SA Innovation 010 005 000 -.005 -.010 -.015 -.020 10 12 14 16 18 20 22 24 21 - Response of the money supply very quickly and reverse previous interest rate shocks Response of interest rates and (IRLt) changes in interest rates before refinancing (IRDt) Chart 4.8: Response of IRLt to Cholesky One S.D IRDt Response of IRL_SA to Cholesky One S.D IRD_SA Innovation 004 003 002 001 000 -.001 -.002 10 12 14 16 18 20 22 24 - The response of lending rates quite quickly before unit standard deviation of policy rates, but the level is not high Response of growth (IPGt) and inflation before the shock of the stock price index (VNIt) Chart 4.9: Response IPGt and CPIt to Cholesky One S.D VNIt Response of IPG_SA to Cholesky One S.D LNVNI_SA Innovation Response of CPI_SA to Cholesky One S.D LNVNI_SA Innovation 020 012 015 008 010 004 005 000 000 -.005 -.004 -.010 -.015 -.008 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 - The value of industrial output respond quickly to the shock of the stock price index in a short time, then fell rapidly at the end of the shock - Inflation on the other hand, failure to respond to the shock of the stock price index, changes are put in the first time Response of the stock price index (VNIt) before the shock of the money supply (M2t) and lending rates (IRLt), interest rate refinancing (IRDt) Chart 4.10: Response of VNIt to Cholesky One S.D M2t, IRDt Response of LNVNI_SA to Cholesky One S.D M2_SA Innovation Response of LNVNI_SA to Cholesky One S.D IRL_SA Innovation 12 Response of LNVNI_SA to Cholesky One S.D IRD_SA Innovation 08 08 06 08 06 04 02 04 04 00 00 02 -.02 -.04 -.04 00 -.06 -.08 -.08 10 12 14 16 18 20 22 24 -.02 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 - The response of the price index before the shock of the money supply is slow, but lasting, then subside - Shock of lending rates make the stock price index rose immediately, but in a short time, then declined slowly stretched - The response of the stock price index before the shock of the refinancing interest rates quickly and dramatically in a relatively long time, then declined slowly and steady approach 4.2.2.3 Analysis of variance decomposition rate channel - Interest rate changes make growth in industrial output value rapidly changing gradually, very weak in the short and medium term - Interest rates change makes change very weak inflation 22 - The impact of the interest rate on the stock price index was very weak in the short term, but in the long run, the more powerful - Impact on the money supply makes change very weak money supply in the short term, in the long term is still weak - Impact on lending rates in the short term and long term with increasing levels 4.2.3 Channel transmission rates in monetary policy in Vietnam 4.2.3.1 Model and structure format Model 1: No variable import-export Yt= f(IPGt, CPIt, M2t, IRLt,EXUt, IRDt)’ Model 2: Add the variable export Yt= f(IPGt, CPIt, M2t, IRLt,MIGt, MXGt, EXUt, IRDt)’ 4.2.3.2 Impulse Response Analysis Response of growth (IPGt), inflation (CPIt) before the shock of the exchange rate (EXUt) Chart 4.12: Response of IPG, CPI to Cholesky One S.D EXUt Response of IPG_SA to Cholesky One S.D LNEXU_SA Innovation Response of CPI_SA to Cholesky One S.D LNEXU_SA Innovation 012 006 008 004 004 002 000 000 -.004 -.002 -.008 -.004 -.012 -.006 -.016 -.008 -.020 -.010 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 - Growth in industrial output value respond quickly to changes in the exchange rate, but in a short time, then slowly and change direction towards stability - Inflation slowed reaction before the shock of the exchange rate in a short time, then declined slowly stretched Impulse response between money supply (M2t) and exchange rate (EXUt) Chart 4.13: Impulse Response between money supply and exchange rate Response of M2_SA to Cholesky One S.D LNEXU_SA Innovation Response of LNEXU_SA to Cholesky One S.D M2_SA Innovation 004 010 008 000 006 -.004 004 002 -.008 000 -.012 -.002 -.016 -.004 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 - The reaction of reducing money supply before the shock of the exchange rate is very fast and powerful - Rates of reaction not see the money supply shock Impulse response between (IRDt) and (EXUt) Chart 4.14: Impulse response between (IRDt) and (EXUt) Response of IRD_SA to Cholesky One S.D LNEXU_SA Innovation Response of LNEXU_SA to Cholesky One S.D IRD_SA Innovation 003 004 002 002 001 000 000 -.002 -.001 -.004 -.002 -.003 -.006 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 23 - The response of refinancing interest rates is very slow before exchange rate shocks - Exchange rate very slowly react before the shock of refinancing interest rate in a very short time, then declined slowly and progress to long-term stability Response of growth (IPGt) and inflation (CPIt) before the shock of import growth (MIGt) Chart 4.16: Response of IPGt, CPIt to Cholesky One S.D MIGt Response of IPG_SA to Cholesky One S.D MIG_SA Innovation Response of CPI_SA to Cholesky One S.D MIG_SA Innovation 012 012 008 008 004 004 000 000 -.004 -.004 -.008 -.008 -.012 -.012 -.016 -.020 -.016 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 - The response of IPGt before the shock of imported relatively quickly, but in a very short time - The response of inflation is very slow and low level before the shock of imports, which rose slowly stretching sua Response of growth (IPGt) and inflation (CPIt) before the shock of export growth (MXGt) Chart 4.17: Response of IPGt, CPIt to Cholesky One S.D MXGt Response of IPG_SA to Cholesky One S.D MXG_SA Innovation Response of CPI_SA to Cholesky One S.D MXG_SA Innovation 016 012 012 010 008 008 006 004 004 000 002 000 -.004 -.002 -.008 -.004 -.012 -.006 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 - The response of IPGt slow growth trend in the early stages before the export shock, then relief and toward long-term stability - The shock of inflation makes exports decreased very slightly in the short term, in the long term, slow growth Response of export growth (MXGt) and imports (MIGt) before the shock of the exchange rate (EXUt) Chart 4.18: Response of MIGt and MXGt to Cholseky One S.D EXUt Response of MIG_SA to Cholesky One S.D LNEXU_SA Innovation Response of MXG_SA to Cholesky One S.D LNEXU_SA Innovation 015 010 010 005 005 000 000 -.005 -.005 -.010 -.015 -.010 -.020 -.025 -.015 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 - The shock of the exchange rate makes imports changed unstable in the short term, then declined slowly stretched - Exports respond quickly to the shock of the exchange rate in the short term, then reverse the prolonged, the more stable long term 4.2.3.3 Analysis of variance decomposition - Rates of other variables affecting very weak in the short term and long term 24 - Exchange rate impact to very low to interest rates, the impact on weak import, export impact was relatively low, the impact on the refinancing interest rate faster than the other variables in the short term 4.2.4 Channel Transmission credit in monetary policy in Vietnam 4.2.4.1 Model and structure format Model 1: Model of the credit channel has not the stock price index Yt= f(IPGt, CPIt, M2t, IRLt, EXUt, CPSt, IRDt) Model 2: Model of the credit channel further stock price index VNIt Yt= f(IPGt, CPIt, VNIt, M2t, IRLt, EXUt, CPSt, IRDt)’ 4.2.4.2 Impulse Response Analysis Response of growth (IPGt), inflation (CPIt), money supply (M2t) before the shock of credit growth (CPSt) Chart 4.20: Response of IPGt, CPIt to Cholesky One S.D CPSt Response of CPI_SA to Cholesky One S.D CPS_SA Innovation Response of IPG_SA to Cholesky One S.D CPS_SA Innovation 015 015 010 010 005 005 000 000 -.005 -.010 -.005 -.015 -.010 -.020 -.015 -.025 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 - Shock of little use rapid impact on growth, but in a very short time, and then change back - Quick response of inflation to low levels and lasted before the shock of the credit in the short term, in the long term downward trend again Response of the money supply (M2t) before the shock of private credit (CPSt) Chart 4.21: Response of M2t to Cholesky One S.D CPSt Response of M2_SA to Cholesky One S.D CPS_SA Innovation 010 005 000 -.005 -.010 -.015 -.020 -.025 10 12 14 16 18 20 22 24 The money supply respond slow to shock of the credit for the first time, then fell slowly extended in the short term, in the long term, the opposite reaction Response of credit growth (CPSt) before the shock of lending rates (IRLt) Chart 4.22: Response of CPSt to Cholesky One S.D IRLt Response of CPS_SA to Cholesky One S.D IRL_SA Innovation 02 01 00 -.01 -.02 -.03 10 12 14 16 18 20 22 24 25 - The response of the private credit rose faster before the shock of lending rates, but only in the short term, then declined slowly stretched Response between credit growth (CPSt) and interest rate refinancing (IRDt) Chart 4.23: Response of IRDt and CPSt Response of CPS_SA to Cholesky One S.D IRD_SA Innovation Response of IRD_SA to Cholesky One S.D CPS_SA Innovation 015 008 010 006 005 004 000 002 -.005 000 -.010 -.002 -.015 -.004 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 - The shock of refinancing interest rate impact on private credit immediately, but very weak - The response increase of the refinancing interest rate before shock of the credit, which lasted in the short term, then the reverse reaction in the long term Response of the stock price index (VNIT) before the credit shock (CPST) Chart 4.24: Response of VNIt to Cholseky One S.D CPSt Response of LNVNI_SA to Cholesky One S.D CPS_SA Innovation 04 02 00 -.02 -.04 -.06 -.08 -.10 -.12 10 12 14 16 18 20 22 24 - Reduction reaction of the stock price index before the shock of credit, extending the low-level, long-term change direction slightly 4.2.4.3 Analysis of variance decomposition - The private credit market affect the stock, the impact of the contribution of private credit makes the stock price index increase - The impact of private credit to make changes in money supply in the short term and long term - Impact of exchange rate changes make slow in the short term, but long-term changes quickly - Impact of interest rate policy making slow changes in the short term, but in the fast-changing medium 4.2.5 The model tested the transmission of monetary policy before and after WTO 4.2.5.1 Unit root test and Cointegration testing Unit root tests show that the sequence data but the original did not stop at the stop level difference 4.2.5.2 Determining the optimal lag According to the test results by the criteria AIC, SC and HQ, optimal lag data series for model before WTO is and after WTO is 26 4.2.5.3 The results estimate the model Table 4.5: Estimates from the matrix A0 Model a21 a26 Before WTO (4,87) After WTO ( 1,82) Model a31 a32 a36 (4,942) (7,562) 0,088 6,708 2,257 2,203 (0,097) (2,885) a41 a42 a46 a51 a52 (1,139) 0,054 (1,706) 3,953 0,006 0,014 (0,020) (2,406) (0,461) 0,043 a54 a56 a61 a64 a65 a71 a72 a73 a74 a76 Before WTO (0,39) 9,999 (0,00) (0,00) (0,00) (0,00) (0,000) 0,000 0,000 0,083 After WTO 0,113 0,00 (0,00) (0,00) 0,00 0,00 (0,00) 0,033 (3,73) 0,00 - The test results are summarized A0 matrix according to Table 4.5 shows the values of the matrix A0 differ markedly in the second period before and after WTO, the phenomenon of "Puzzle" has appeared in many variations 4.2.5.4 Impulse Response Analysis Chart 4.25: Response of IPGt to Cholesky One S.D IRDt Response of growth of industrial output value of the interest rate difference before and after the WTO in the near term, in the same relative term Chart 4.26: Response of IPGt to Cholesky One S.D M2t Response of the previous IPGt money supply shocks obvious difference before and after the WTO in the short term Chart 4.27: Response of CPIt to Cholesky One S.D IRDt Cú sốc lãi suất tác động đến lạm phát giá tiêu dùng khác biệt rõ rệt hai giai đoạn trước sau WTO Interest rate shock impact on consumer price inflation significantly different between pre- and post-WTO period 27 Chart 4.28: Response of (CPIt) to Cholesky One S.D M2t Response of inflation to the money supply shocks similar before and after the WTO, in the long term there is a difference, however insignificant 4.2.5.5 Analysis of variance decomposition Decomposing variance showed a significant difference before and after the WTO: - For IPGt variables, the period before the WTO showed itself apart from the impact of the impact also from other variables - Phase change after WTO, the impact from other variables to lower IPGt period before the WTO 4.2.6 Determinants factor adjust policy interest rates The result estimation of Equation (21) CLIRDt =0.3134CLCPTt + 0.0012CLIPGt – 0.00005 4.2.7 Transmission from policy rates to lending rates, credit private sector 4.2.7.1 The transmission from interest rates to refinance lending rate The result estimation of Equation (22) IRLt = 0.842IRDt + 0.054 4.2.7.2 Transmission from refinancing interest rate to credit private sector The result estimation of Equation (23) CPSt = 0.971CPSt-1 – 0.375 IRDt-2 + 0.035 4.2.8 Inspection of the factors affecting credit private sector The result estimation of Equation (25) CPSt = 0.329IPGt – 1.285IRTt + 0.861M2t + 0.042 4.3 RELATIONSHIP ANALYSIS GRANGER CAUSALITY - There exists a relationship bidirectional causality from the tool to the target variable, such as M2 and CPI, IRD and M2, IRL and CPI, M2 and VNI, IRD and IRL, CPS and CPI, CPS and M2, CPS and IRL, IRD and CPS - There exists a causal relationship one way from the tool to the target variable, such as IRD and IPG, CPI and IRD, VNI and IPG, IPG and IRL, IPG and CPS, EXU and CPS, CPS and VNI, M2 and EXU 4.4 ANALYSIS OF COINTEGRATION - Interest rate channel model have cointegration, exchange rate channel model has cointegration, credit channel model has cointegration - These results show that long-term relationship between variables in the model - Long-term relationship between variables in the model tells us transmission from the tool to the target variable in the model is effective in the short term and long term - Analysis of cointegration provided further evidence linking positive relationship between variables together and the results showed that in the long term, between variables in the model survive long-term relationship 28 Conclusion Chapter - The value of industrial output changed the same way with the money supply and changes inversely to refinancing interest rates, the phenomenon "Puzzle" to variable refinancing interest rates and money supply, when refinancing interest rates increase the money supply increases slowly making - Prices and external policy rates significantly impact the elements inside - Growth of industrial output value of rapid response and strong before the shock of interest rates - Shock of the money supply causes the value of industrial production decreased rapidly, there exists the phenomenon "Puzzle" between money supply growth and industrial output in the first period - Lending rates rose immediately to impact industrial production value and makes industrial output value rose fast and hard - Stock price index has an impact on industrial output growth - Stock Price Index response to changes the money supply is relatively high and sustained, between lending rates and CPI have phenomenon "Puzzle" early stages, very short Similarly lending rate, interest rate policy and the stock price index is also the phenomenon of "Puzzle" - Through the exchange rate channel, the exchange rate makes the value increase output in the short term slow decline - The reaction of the previous exchange rate shocks very low policy rates in the short term - Reaction of growth of industrial production value before the shock of import growth is relatively fast, but in a very short time - Imports are very sensitive to exchange rate shocks, but unstable in the short term, very short response before the shock of the exchange rate - Analysis of variance showed that the decay rate of the other variables affecting very weak in the short term and long term - When private credit change inversely to the value growth of industrial output - The reaction of the previous inflationary shock of private credit growth slow and prolonged - The difference between the refinancing interest rate depends on the change of inflation, whereas no relationship between growth in industrial output value and interest rate changes - When SBV adjusted 1% refinancing interest rate, the lending rate changes 0.84, lending rates are largely dependent before refinancing rates - Private credit directly affected by such important variables as growth, interest rates and money supply 29 CHAPTER HINTS SOLUTION OF MONETARY POLICY OF VIETNAM 5.1 COMMENTS MONETARY POLICY EXECUTIVE These issues gained and the existence and operating limitations in the policy interest rate in Vietnam last time These issues gain Firstly, the interest rate policy has been operating quite reasonable and consistent with the economic development process through each stage Secondly, the implemented instrument of monetary policy other besides interest rates have made quite flexible but less efficient Thirdly, flexible interest rate management, to curb inflation in a positive and efficient but not make the economy grow too low Fourthly, the policy interest rate suitable with the trend of integration, prevent currency speculation damaging large market Fifth, policy management more flexible exchange rate in recent times, as shown by the central bank repeatedly increased amplitude fluctuations of the exchange rate To make proactive, flexible exchange rate before the adverse effects on international markets mentioned above, ensure the competitiveness of Vietnam's goods The existence and limits of monetary policy Firstly, the basic interest rate is not imperative, as athletic interest survey to establish lending rate for credit institutions Nonbanking Secondly, operating through other tools such as open market operations, reserve requirement ratio is not uniform, regardless of what tools are affecting the economic sectors Thirdly, market interest rates interbank thirst for capital by banks that the central bank does not lend money to small banks Fourthly, the central bank has not taken measures to control the costs of commercial banks The study results showed that the rediscount rate strong impact on the average lending interest rate in the market 5.2 HINTS SOLUTION EXECUTIVE POLICY INTEREST RATE 5.2.1 Operating short-term interest rate policy - Executive versatile tools on the currency market, the open market instruments contributed to rapid short-term interest rate stability - In the short term given the central bank bill rate reasonable, flexible and fast 5.2.2 Operations in the direction of interest rates Proximity: interest rates change slowly, without shocks - Interest rate adjustments should be stable in the long term, the changes should not change the shock that should change slowly, not to create shock - Operations for inflation and growth targets will help the economy consistent direction - Executive stable long-term interest rates is the goal to pursue 5.2.3 Commitment to stable interest rates for the pillar industries, long-term projects - Development of monetary policy must be to hand with the development of pillar industries, monetary policy must aim to pillar industries - The central bank tries to stabilize the current interest rates, stable and committed long-term lending rates for projects with a life of years - The central bank also pledged to coordinate with commercial banks long-term interest rates at least years for investment projects of enterprises in years time 5.2.4 Controlling the money supply in order to stabilize inflation - The central bank should have a stable solution contributing to a stable money supply growth and inflation - Do not focus on a specific market, that is not so for a certain market overheating that require stable solutions the market before developing signs of heat 30 5.2.5 Effective control of lending support package - Need to is to manage and monitor the funding on the right objectives 5.2.5 State Bank takes measures to ensure liquidity for the economy SBV launched measures to regulate the supply of money in the financial markets - Buying and selling flexibility valuable papers, diversification of valuable papers to provide liquidity to the market - Stable interest types buying and selling of valuable papers, contributing to stabilizing market interest rates Coordinate with government development financial markets stability - Diversification of financial instruments, contributing to diversification of supply and demand for capital - Development of derivatives market to enhance the liquidity of the stock market and bond market 5.3 EXECUTIVE OPTIONS EXCHANGE RATE POLICY 5.3.1 Expanding the amplitude changes in exchange rates contribute to promoting economic growth - In the future, the operating rate by increasing rates, widened the more appropriate 5.3.2 Operations in order to stabilize the exchange rate policy rates - For close coordination between the different objectives of the economy 5.3.2 Operating exchange rate to enhance the competitiveness and economic development 5.3.2.1 Adjusting the exchange rate in the near future - Place the operating rate target in favor of exports 5.3.2.2 Failing to strong domestic currency devaluation - Devaluation of the local currency when the local currency is still overvalued, but must control monetary stability and restrain inflation 5.3.2.3 Reducing the role of the exchange rate in maintaining the competitiveness of goods - Exchange rate policy should put the overall picture of Vietnam's economy, fiscal policy, monetary impacts from the outside - Government should collaborate synchronously pricing policies, monetary and fiscal, focusing on economic forecasting, timely response before the fluctuations of the economy 5.4 EXECUTIVE SOLUTIONS MONETARY POLICY THROUGH CREDIT CHANNEL 5.4.1 Executive flexible interest rate policy based on the principle of lending rates less than the average income of the enterprise production and business - Maintain a stable interest rate lower than the current level 5.4.2 Executive monetary policy objectives through growth - Operating targeted policies, operators are more active in the coordination of instruments and policy towards a stable 5.4.3 Executive monetary policy through inflation targeting - Inflation target economic departments offer only specific periods and tied to economic growth 5.4.4 Controlling interest rates based on real lending rate - The interest rate toward positive real interest rates, contributing to sustainable growth 5.4.5 strictly control credit activities at state banks - State Bank money supply needs to be coordinated, especially in credit operations between commercial banks 5.4.6 To develop a healthy and stable financial market - Must have policies to support the market in the right direction, sustainability and safety - Macroeconomic policies related to the regulatory environment and development must conform to the trend of the market and the world 5.4.7 Increasing effective operating information in credit policy 31 - Disclosure of information to changes in interest rates in order to inform policy actors in the economy in order to avoid shocks to the credit impact 5.5 COORDINATION FISCAL POLICY AND MONETARY POLICY EFFICIENCY - Closely coordinate monetary and fiscal policy - Two of this policy should be directed to the same target growth and price stability, create jobs and improve social life 5.6 LIMITATIONS OF RESEARCH TOPICS AND FOLLOW RESEARCHES Limitations of the topic: Although the subject has achieved certain research goals But there are still limitations in the study The first restriction is that the data in the study The second limitation is not the subject of a separate analysis of the monetary policy transmission channel through asset prices A third constraint is not a research article transmission of monetary policy through interest rate types retail, bank credit to the banking system in Vietnam, international trade credit, domestic credit business in addition, credit state budget Research followed by full selection macro variables in the study to achieve the best goal: better analysis asset price channel, the credit channel needs more example: credit growth and the impact of credit growth to economic growth, inflation and employment 32 CATEGORY RESEARCH PAPERS OF AUTHOR RELATED TO THE THESIS HAS BEEN PUBLISHED Interest rate channel of monetary policy transmission in Vietnam before and after WTO, Economic Journal Asia-Pacific, May 2016 Credit policy in the monetary policy transmission in Vietnam, Journal of economic and forecasting, No 22 (630) month 9/2016 The interest rate channel in the transmission of monetary policy in in Vietnam, Finance and performance of firms in science, education and practice International Scientific Conference, Tomas Bata University Zlín, Czech Republic, 7th, April/ 2015 Credit channel in monetary policy transmission in Vietnam, Finance and performance of firms in science, education and practice, International Scientific Conference, Tomas Bata University Zlín, Czech Republic, 7th, April/ 2015 Interest rate policy in Transmission of Monetary policy prior to and since the WTO joining in Viet Nam, 2nd International conference on finance and economics (ICFE 2015), June/ 2015 The Exchange rate channel of monetary policy transmission, 2nd International conference on finance and economics (ICFE 2015), June/ 2015 Policy interest rates in monetary policy transmission in Vietnam, Journal of Economic Management (CIEM), 65, 1/2015 Asset price channel in Transmission of Monetary policy in Vietnam, Economic Journal Asia-Pacific, April 2017 ... Vietnam Based on the analysis of the monetary policy state in Vietnam and SVAR model theory, in this part model design themes as a framework of monetary policy transmission mechanism in Vietnam... tiền tệ giới IMF International Monetary Fund (IMF) IRDt Refinancing interest rate IRLt M2t The average lending interest rate Money supply growth EXUt Exchange rate USD/VND State Bank of VietNam... in the transmission mechanism of monetary policy in Vietnam or not? RESEARCH SCOPE Researching the monetary policy transmission in Vietnam through channels phase from 2001 to 2014 RESEARCH METHODS