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Transfer Money Policy through Credit Channels in Vietnam

Author

Listed:
  • Pham Thi Ha An

    (Van Lang University, No. 45 Nguyen Khac Nhu Street, Co Giang Ward, District 1, Ho Chi Minh City, Vietnam.)

  • Nguyen Thi Quynh Dung

    (Van Lang University, No. 45 Nguyen Khac Nhu Street, Co Giang Ward, District 1, Ho Chi Minh City, Vietnam.)

Abstract

Study and examines the impact of monetary policy transmission through credit channels in Vietnam based on the research model of Sun et al. (2010). To estimate this model system, the author uses VECM method with secondary data taken from reliable sources on the situation of Vietnam consumer price index, credit growth of the economy, deposits of customers, industrial production in Vietnam, growth of M2 money supply, rediscount interest rate; VN Index from January 2008 to December 2017. The research results show that both in the short and long-term, the rediscount rate has a negative impact on the credit growth of the economy. When the State Bank of Vietnam implements an expansionary monetary policy with a discounted interest rate tool, it will have an impact on increasing the total credit supply of the economy. However, an increase in economic credit will increase economic output ( represented by Vietnam's industrial production value) in the short term; or the impact of monetary policy transmission via credit channel in Vietnam shows that there exists a short-term credit channel but does not exist in the long term.

Suggested Citation

  • Pham Thi Ha An & Nguyen Thi Quynh Dung, 2019. "Transfer Money Policy through Credit Channels in Vietnam," International Journal of Economics and Financial Issues, Econjournals, vol. 9(6), pages 33-39.
    • Handle: RePEc:eco:journ1:2019-06-4
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    References listed on IDEAS

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    More about this item

    Keywords

    monetary policy; credit channels; VECM method;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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