Credit control contributes to enhancing macro-prudential measures Practice in some countries and Vietnam

Abstract

In the world, central banks have utilized credit control measures to enhance macroprudential,
monetary, and other macro policies to achieve economic goals. Since 2011, the State Bank of Vietnam has
adopted credit control as an administrative measure, alongside its more conventional monetary policy tools
(refinancing, interest rates, exchange rates, reserves requirements, and open market operations) to curb
inflation at its annual target level. In its function, credit control (setting the credit growth targets) acts as
an immediate target which assists the SBV in achieving its monetary policy targets and ensuring macroprudential and stability of the banking system. This Article discerns some stylized facts of Vietnam’s credit growth data and its time-varying co-volatility relationships with economic growth and inflation. Combined
with a meta-analysis of some studies and reviews of monetary policy through the lens of both interest
rate-based monetary policy as well as one monetary aggregate to qualitatively evaluate and analyze the
management of credit growth instruments of the SBV from 2011 to the present. The Article concludes with
strategic proposals for the use of this measure in the coming time.