The benchmark VN-Index, gained 28.97 points Friday to close at 640.14 points, keeping the index above the psychologically important 600-point mark for a second day.

Deputy Prime Minister Nguyen Sinh Hung spoke about the government’s move with local reporters.

Here are excerpts:

What is the main purpose of the government ordering the State Capital Investment Corporation, which manages the government’s shareholdings, to buy stocks?

Nguyen Sinh Hung: We shouldn’t consider the government’s move as an act to rescue the market.

The government just made some adjustments to its policies to try to improve the stock market.

Similarly, a delay of the initial public offering (IPOs) of state-owned companies means the government used its available tools, which in this case is its stake in those companies, to reduce the oversupply of stocks on the market.

The government has never intervened in the market’s rules; it only uses the tools available to support it.

With its recent policies, I am confident the stock market will continue to recover.

I would buy stocks now if I was a stock investor.

The market had been affected badly by some macroeconomic policies. What is the government’s view about this fact?

Monetary policies are still open for the stock market.

For example, the government still allowed investors to borrow money from local lenders to invest in stocks.

But the amount of loan must be in accordance with central bank’s regulations.

Setting up banks and brokerages is also encouraged but it has to conform to the state bank’s regulations, which will be drawn up soon.

The government’s tighter policies are an attempt to reject weak businesses.

Increasing interest rates at local banks were affecting domestic businesses. What will the government do to counter this?

The issue wouldn’t have occurred if we kept a closer eye on the credit market.

Therefore, the government will more closely supervise deposit interest rates in the coming days.

I instructed the central bank to limit the rate to 12 percent per year.

This cap will be lifted by the end of the year.

Local enterprises would be forced out of business if interest rates surged to 20-30 percent per year.

In note, the Prime Minister ordered ministries to curb speculation on real estate by supervising property loans. Could you explain the note?

It means the central bank will closely monitor local lenders.

Local banks, which approve property loans without properly checking the lender’s level of risk, will be punished by the state bank.

The government encourages investment, not speculation.

There’s no limit on the amount of money that can be loaned to those who want to buy a house to live in.

The stronger dong is affecting local exporters, will the government accept that?

Our monetary policy must be strict, active and super-flexible.

Strict doesn’t mean tightening.

It just means credit growth must not be too high, it should only reach 30 percent.

The dong’s liquidity must be ensured.

Trading foreign currencies must be controlled.

Additionally, dollar/dong deals will be executed within a band of +/-2 percent.

The daily band can be maintained at the current rate of 0.75 percent or will rise to 1-1.5 percent, depending on the requirement of the monetary circulation.

Adjustments to the dong exchange rate must be flexible.

The central bank will be responsible for ensuring foreign investment in local production or stock market.

At the outset, the dong will be stronger, adding to the pressure on local exporters.

But how can we achieve the goal of export growth of 25 percent this year?

Local exporters should opt for suitable markets to enter.

Restraining imports means halting machines and material geared towards production.

That’s unacceptable.

The stronger dong also resulted in imported commodities become cheaper, worsening the trade deficit.

So we must focus on importing materials for local production and restraining the consumption of commodities.

Public spending is also one of the main causes of the high inflation rate. So what will the government do to solve this problem?

Public spending is mainly on developing infrastructure, which is a priority.

The government doesn’t plan to cut public spending, but it will ensure it is spent in the right places: fighting corruption, for example.

Other public spending this year will be reduced by 10 percent.

The country has to deal with so many difficulties this year. Could you forecast the economy growth rate this year?

We will adjust the goal to adapt to the situation. We shouldn’t focus too much on the figure but on the quality of the growth.

It’s best to focus on preventing inflation from denting the economy and taking advantage of any opportunities to stimulate economic growth.

Once we overcome the difficulties, we will able to sustain economic growth.

Source: Tuoi Tre