The 7th bilateral meeting between SBV and Bank of Lao P.D.R.

The Meeting was also attended by the SBV Deputy Governor Dao Minh Tu, representatives from the SBV entities including the International Cooperation Department, the Banking Supervision Agency, the SBV Office, the Communications Department, the Foreign Exchange Management Department, the Organization and Personnel Department, the Monetary Policy Department, the Issue and Vault Department, the State Bank of Vietnam – Quang Ninh branch; on the Lao P.D.R. side there were representatives of the BOL Executive Board, leaders of the BOL entities including the International Relations Department, the Organization and Personnel Department, the Financial Institution Supervision Department, the Monetary Policy Department, the Internal Audit Department, the Payment Department, the BOL Office, the BOL Printing House,...

At the meeting, SBV Governor Le Minh Hung expressed his deepest condolences to the Party, the Government and the people of the Lao P.D.R. for the losses caused by the recent dam collapse in Attapeu province. As a nation under frequent impacts and damage caused by natural calamities, Vietnam very much understands and shares with the difficulties and losses that Laos is experiencing. The Government and the relevant ministries of Vietnam are actively supporting Lao counterparts to mitigate the damage caused by this disaster.

The 7th bilateral meeting was divided into two sessions: The first session was the bilateral talks between the two central banks. At the second session, the two Governors co-chaired a dialogue with Vietnamese commercial banks which are now operating in Laos.

Bilateral talks between the two central banks

In his opening speech at the meeting, SBV Governor Le Minh Hung warmly welcomed the BOL Delegation led by Governor Somphao Phaysith to visit and work in Vietnam. The SBV Governor also expressed his confidence that the bilateral meeting between the two central banks would be successful and would achieve the expected targets.

Governor of the State Bank of Vietnam Le Minh Hung delivers the opening speech at the Conference

For this year's bilateral meeting, Governor Le Minh Hung mentioned the honor of being the host and for co-chairing with Governor Somphao Phaysith at this important event. Since the 6th bilateral meeting held in Laos in February 2017, the cooperation between the SBV and the BOL has been continuously developed and has achieved a lot of practical results. On the basis of the Memorandums of Understanding (MOUs) signed between the two sides, the two central banks have actively exchanged, planned and expeditiously carried out various activities, in all aspects of professional work as well as exchanges, strengthening the unity between different levels of staff of the two sides.

At the meeting, the representatives of the two central banks’ departments discussed the macroeconomic situations, the implementation of the monetary policies, the banking supervision and payment operations, the Fintech situations in both Vietnam and Laos.

For more than a year since the 6th Vietnam - Laos bilateral meeting in February 2017, Vietnam’s economy, with a high degree of openness (represented by an international trade volume of over 190% of the GDP in 2017), has continued to be influenced by the economic developments in the region and the world. In 2017, the global economy continued to recover with remarkable improvements in investment, trade and consumer confidence, which in turn has made a positive impact on the domestic production. In 2018, the world economic growth has continued to improve, but there are still many potential risks and challenges, including the price increases of the essential commodities such as petrol, iron & steel, fuels,..., causing pressures on inflation; global trade has maintained its growth momentum but is now facing many difficulties due to trade tensions between the United States and China and other major partners such as the European Union and Japan.

In addition, the trend of increasing protectionism of the big countries, especially changes in the US trade policy, has affected the production and export of several countries in the region including Vietnam. In addition to the existing issues of the domestic economy such as the quality of growth, the low productivity and competitiveness, the increasing number of businesses suspending operations, the natural disasters, typhoons, floods and unfavorable weather patterns have also made negative impacts on agricultural production, and by 2018, the inflation pressures will increase as the world fuel prices increase. In that context, implementing the National Assembly’s and Government's resolutions on socio-economic development, the SBV has synchronously and flexibly operated the monetary policy instruments to stabilize the monetary market, and thus contribute to controlling inflation and supporting economic development.

According to the orientations of the Communist Party of Vietnam set out in January 2011, the SBV has been persistently following the policy of reforming the growth model and restructuring the economy toward the direction of transforming the growth model from a large scale development to a rational development of breadth and depth, while expanding the scope also focusing on improving the quality, the efficiency and sustainability. Specifically, the SBV has been restructuring the credit institutions focusing on restructuring of production industries and services in accordance with the regions’ advantages; promoting corporate restructuring and adjusting the market strategy; rapidly increasing the domestic values, the added values and the competitiveness of Vietnamese products, Vietnamese enterprises and the whole economy; developing the knowledge economy...

SBV Governor Le Minh Hung affirmed that the policy of economic restructuring coupled with the transformation of the growth model toward sustainability has been implemented drastically in the recent years. Regarding the restructuring, three focus areas are identified including public investment restructuring; restructuring of the financial and banking system; and the commercial banks and SOEs restructuring, with focus on state companies and corporations.

In addition, on the content related to the development of Fintech, Governor Le Minh Hung also discussed the implementation results of the Scheme for the development of non-cash payments in Viet Nam between 2016 to 2020 approved by the Government. SBV Governor Le Minh Hung also stressed that the SBV is ready to continue to cooperate and share its experience with the BOL in this area. The SBV Governor promised to assign the relevant units of the SBV to cooperate and exchange information with the BOL units to plan for and implement these activities.

BOL Governor Somphao Phaysith delivers a speech at the Conference

In exchanging about cultural,sports and professional exchanges, BOL Governor Somphao Phaysith said that this year the BOL will be the host of the exchange program between the two central banks in Chanpasak province, Laos. In addition, BOL Governor Somphao Phaysith also agreed with the SBV's proposal to expand participation in the exchange program to include the Vietnamese commercial banks currently operating in Laos. Thereby, the exchange program will be upgraded to become an exchange between the two banking sector, helping to strengthen the cooperation and linkages between the parties, giving an opportunity to diversify the activities and expand the friendly games between the two countries.

Dialogue with Vietnamese commercial banks operating in Laos

At the meeting, the representatives of Vietnamese commercial banks (Vietcombank, Vietinbank, BIDV, Agribank, MB, Sacombank, SHB) presented their reports on the operations and banking performances in Laos. At the same time, these representatives also proposed some suggestions and recommendations to the two Governors, such as the expansion of Vietnamese commercial banks’ branch network in Laos, the challenges encountered with the monetary policy, the foreign currency management in Laos...

Overview of the Dialogue with Vietnamese commercial banks operating in Laos

BOL Governor Somphao Phaysith highly appreciated the activities of Vietnamese commercial banks in Laos over the past time, thus contributing significantly to the socio-economic development process of Laos. At the same time, BOL Governor Somphao Phaysith accepted to consider the recommendations of Vietnamese commercial banks in the spirit of creating favorable conditions for the commercial banks to operate effectively in Laos. In particular, in response to the proposals of Vietnamese commercial banks to expand their investment activities in Laos, BOL Governor Somphao Phaysith promised to take into serious consideration and would try to create favorable conditions for Vietnamese commercial banks to develop in Laos, with a view to further promoting the bilateral cooperation in the banking sector.

SBV Governor Le Minh Hung affirmed, the commercial banks of Vietnam are committed for long-term investments, complying with the laws and striving for the sustainable development of the two countries as well as the two banking systems. He highly appreciated the efforts of every bank and the valuable support from Lao Government and the Bank of Laos given to Vietnamese commercial banks to obtain such positive results. On behalf of the SBV Management Board, Governor Le Minh Hung expressed his gratitude and hoped that the Government of Laos and the BOL would continue to support Vietnamese commercial banks in Laos and consolidate and realize the potentials of the bilateral investment cooperation.

Vietnamese banking sector supports flood relief efforts in Attapeu province, Laos

The Governors of the SBV and the BOL take photos with the delegates attending the conference

The two sides pledged to promote and create favorable conditions for the commercial banks of the two countries to establish cooperation, trade and investment presence in the two countries, in order to promote the development of the banking systems and better serve the investment, trade and business activities of the businesses and investors of both countries.

SBV Governor Le Minh Hung believed that this year's bilateral meeting continued to be a useful forum for both sides to increase mutual understanding, strengthen the cooperation and two-way support in the professional fields, as well as to promote the exchanges to deepen the special brotherhood between the two central banks as well as the two countries.

VA