UNIVERSITY OF LANGUAGES & INTERNATIONAL STUDIES,

VIETNAM NATIONAL UNIVERSITY, HANOI

FACULTY OF LINGUISTICS AND CULTURES OF
ENGLISH-SPEAKING COUNTRIES

COURSE NAME: ENGLISH FOR FINANCE AND BANKING

INSTRUCTOR: TRAN THU HA, MA
STUDENT’S NAME: LE THUY TIEN
STUDENT’S ID: 19010466
STUDENT’S EMAIL: lttien3801@gmail.com
ASSIGNMENT: FINAL ESSAYS
DUE DATE: December 27h, 2022

Hanoi – 2022
 TABLE OF CONTENTS

Topic 1: Monetary and fiscal policies against COVID-19

INTRODUCTION .......................................................................................... 1

CHAPTER I: THEORETICAL BASIS ....................................................... 1

1.1. Concept of monetary policy ................................................................ 1
1.2. The concept of fiscal policy ................................................................ 2
1.3. Concept of financial policy ................................................................. 3

CHAPTER II: IMPACT OF COVID TO VIETNAM ECONOMY .......... 4

2.1. Impact on demand ............................................................................... 4
2.2. Impact on the bow............................................................................... 6

CHAPTER III: FINANCIAL AND MONETARY POLICIES AFTER

THE COVID OUTBREAK ............................................................................ 7
3.1. Financial policy................................................................................... 7
3.2. Monetary Policy .................................................................................. 8
3.3. Coordination of monetary and fiscal policy in several countries ....... 9
3.4. Some recommendations for Vietnam................................................ 14

CONCLUSION ............................................................................................. 19

REFERENCES
 Topic 1: Monetary and fiscal policies against COVID-19

INTRODUCTION
The year 2020 passed with most economic and social events associated
with the COVID-19 pandemic. The COVID-19 epidemic is a danger not only
to human health safety but also a shock to the global economy, including
Vietnam. However, by the end of 2020, in the context that the world economy
is still in a deep recession due to the severe impact of the COVID-19 epidemic,
Vietnam has become a bright spot of the world - effectively implementing the
goal of "both disease prevention and socio-economic development". Monetary
policy (CSTT) and fiscal policy (CSTK) constitute an important policy system
to microregulate the economies of every country. The tools of these two
policies are both independent and interactive, supporting each other. CSTK
directly affects government spending (G) or indirectly on consumption (C),
investment (I), and net import and export (NX) which ultimately affects
aggregate demand (Y). CSTT adjusts the money supply level, directly affecting
the market...

CHAPTER I: THEORETICAL BASIS

1.1. Concept of monetary policy

Monetary policy is a part of the overall economic policy system of the

state to implement macro management of the economy to achieve socio-
economic goals in each period. identify. Monetary policy can be understood in
both a broad and conventional sense. In a broad sense, monetary policy is the
policy of managing the entire monetary volume in the national economy to
influence the four major goals of the macro-economy, on that basis, the basic
objective is to be realized. stable. currency, maintaining the purchasing power
of the currency, stabilizing commodity prices. In the conventional sense, policy
is concerned with increasing the money supply in the coming time (usually a

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year) in line with the expected economic growth and the inflation rate if any,
of course also aiming to stabilize the economy. situation. currency and stabilize
commodity prices. We can assert that, if fiscal policy focuses only on
components. The tax cost structure of the state, national monetary policy
focuses on the degree of solvency guarantee for the entire national economy,
including meeting the volume required for circulation. connect, control the
monetary system, and credit volume to meet capital for the economy, facilitate
and promote the operation of the money market and capital market according
to the predetermined trajectory.

1.2. The concept of fiscal policy

Definition of Fiscal
Fiscal is a cycle within a period of 42 months, valid for annual estimates
and finalization reports of the state budget as well as of enterprises.
Fiscal is also a time to calculate annual tax, so depending on the regulations of
each country or according to the operating needs of businesses, the fiscal year
may coincide with the calendar year or be different from the normal calendar
year. For example, in the United States, most companies choose their fiscal year
to coincide with the calendar year, but for all department stores, the fiscal year
runs from February 1 of the previous year to January 31 of the following year,
or In particular, for some billions, the fiscal year runs from the 1st of July to
the 31st of June of the following year. In some other countries such as England
(according to the Finance Law of 1854), the fiscal year is from April 1 of the
previous year to March 31 of the following year. However, for the State to tax
income or capital tax, this time is usually extended for another 5 days, is until
April 5 of the following year.
An overview of fiscal policy
Fiscal policy is a tool of macroeconomic policy that affects the size of
economic activity through changes in government spending and/or taxes.

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In the 1930s, Keynes argued that the government needed to increase spending
and be willing to accept a budget deficit to move the economy from rampant
unemployment to near-full employment.
Theoretically, a policy of increasing spending or cutting taxes increases
aggregate demand through the death label effect, thereby creating more jobs to
meet the increased aggregate demand and increasing national income from Y
to Y1. (As shown in the image below). If the level of economic activity is too
high, or the economy is too hot, the government can cut spending or raise taxes
to cut aggregate demand.

1.3. Concept of financial policy

In a broad sense, the macroeconomic policies that regulate the movement of

capital and monetary flows mentioned above can be collectively referred to as
financial policies. In fact, the State's financial policy has long been understood
in a narrow sense - that is, the State's orientation on the use of the State budget.
From this perspective, financial policy is often understood to include only tax
policy, budget expenditure policy, budget decentralization, which are only
aspects related to the creation and use of the State budget. does not fully reflect
the content of the financial policy. Financial policy in its broad sense includes
the following:
- Tax budget policies, domestic and foreign capital mobilization policies,
policies on the use of financial resources.
- Monetary policy
- Policy towards capital market

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 CHAPTER II: IMPACT OF COVID TO VIETNAM ECONOMY

2.1. Impact on demand

The Covid-19 epidemic has been brought under control, the progress of
vaccination against the Covid-19 epidemic has achieved positive results and
the Government's Resolution No. 128/NQ-CP dated October 11, 2021 was
issued in a timely manner. Due to the continued implementation of the dual
goal of "epidemic prevention and socio-economic development", the total retail
sales of consumer goods and services have prospered. Services and necessities:
According to the General Statistics Office, the total retail sales of consumer
goods and services in the first nine months of 2021 decreased by 7.1% over the
same period last year, if excluding the factor prices decreased by 8.7% (the
same period in 2020 decreased by 5.1%). The group of food and food products
was estimated at 977.7 trillion VND, accounting for the largest proportion in
the commodity groups with 35.2%, up 5% over the same period last year
because this is an essential commodity group for service. The daily living needs
of the people should remain stable, and this is partly due to the increase in prices
of food groups compared to the same period in 2020.
Accommodation and food services: better growth as localities began to
gradually relax distance measures to realize the dual goal of ensuring anti-
epidemic and socio-economic development, but in the first 9 months 2021 is
still down compared to the same period last year. Revenue from
accommodation and food services in 9 months of 2021 was estimated at 279.4
trillion VND, down 22.1% over the same period last year, in which,
accommodation service revenue reached 19.5 trillion VND, down 37.1%; food
service revenue reached 259.9 trillion dong, down 20.7%.
Travel and tourism service industry: continuing to be heavily affected by
the Covid-19 epidemic, many provinces/cities with tourism activities in
September are still frozen. In the first nine months of 2021, international

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visitors to Vietnam were estimated at 114.5 thousand arrivals, down 97%
compared to the same period last year. The reason is that because Vietnam
continues to take preventive measures against the Covid-19 epidemic, it has not
yet opened to international tourism, so the number of visitors in the month is
mainly foreign technical workers working in foreign countries. project in
Vietnam.
For the field of investment capital: The realized social investment capital
at current prices in the first nine months of 2021 only increased by 0.4% over
the same period last year because many localities applied social distancing
measures. disruption of production and supply chains of production, business
and investment activities. Total foreign investment capital registered in
Vietnam as of September 20, 2021, reached 22.15 billion USD, up 4.4% over
the same period last year.
For the field of import and export: Import and export turnover of many
goods has been significantly affected by the Covid-19 epidemic, which
continues to be complicated in the world, especially in Vietnam's leading
trading partners. Generally, for the first nine months of this year, the total
import and export turnover of goods still maintained a high growth rate,
reaching US$483.17 billion, up 24.4% over the same period last year, of which
exports increased by 18. 8%; imports increased by 30.5%. In the first 9 months
of 2021, the trade balance of goods has a trade deficit of 2.13 billion USD (the
same period last year, the trade surplus is 16.66 billion USD), of which the
domestic economic sector has a trade deficit of 21 billion USD; FDI sector
(including crude oil) had a trade surplus of 18.87 billion USD.
Banking, insurance, and stock market activities:
- As of September 20, 2021, the total means of payment increased by
4.95% compared to the end of 2020; capital mobilization from credit
institutions increased by 4.28%; credit growth of the economy reached
7.17%. Total capital mobilization for the economy of the stock market

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 in the first nine months of this year was estimated at VND 292.1 trillion,
up 12% over the same period last year; average trading value on the stock
market reached VND 24,042 billion/session, up 224% compared to the
average in 2020; The average trading value on the bond market reached
VND 10,948 billion/session, up 5.3%.
- Insurance premium revenue of the whole market in 9 months of 2021 is
estimated to increase by 13% over the same period last year, of which
life insurance premium revenue increases by 17%; non-life insurance
sector increased by 5%. The Covid-19 epidemic has had a negative
impact on the insurance business, especially the life insurance industry,
with the specificity of having to meet face-to-face to advise customers
because the insurance industry is not part of the group of products.
Because the income of people during the epidemic prevention and
control period decreased, it had to be closed and temporarily stopped
operating during the period of essential goods. premiums for existing
insurance policies and restrictions on participation in new insurance
packages

2.2. Impact on the bow

Supply of production materials: In the first months of 2021, our country

faces difficulties in the supply of raw materials, input components for
production. The processing and manufacturing industries depend a lot on
imports from China, Korea, and Japan - countries where the epidemic is
spreading. Border control measures to prevent epidemics in these countries will
affect the source of input products for production, as well as the consumption
market, especially for the automotive and textile industries. garment and
footwear, electronics industry. In Vietnam, the supply of raw materials for
production mostly comes from China. Therefore, when the Covid-19 pandemic
broke out, China closed the factory for a long time, making it difficult for raw

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materials sources from China, even disrupting other modes of transportation,
by air, by sea or by land. It is also not favorable due to epidemiological testing
problems or high transportation costs. As of September 2021, there are 9.1
million people aged 15 and older who are negatively affected by the Covid-19
epidemic including: people who lose their jobs must quit their jobs, take
rotational leave, and reduce working hours, reducing their income. Of which,
540 thousand people lost their jobs, 2.8 million people had to temporarily
suspend/suspend production and business; 3.1 million people said they had
their hours cut or forced to take time off, and 6.5 million workers reported a
reduction in income.
Many businesses, especially those with foreign experts and foreign
workers, are heavily affected by the Covid-19 epidemic when the labor supply
is in short supply, and the cost of using labor during this period is also high.
More when businesses must invest in more masks and sanitizers to take safety
measures at work to avoid infection.

CHAPTER III: FINANCIAL AND MONETARY POLICIES AFTER

THE COVID OUTBREAK

3.1. Financial policy

First, study and complete the policy on state budget revenue, strive to
complete the assigned revenue estimates at the highest level, and reasonably
mobilize resources to serve socio-economic development goals. Second,
improve the efficiency of management, allocation, and use of the state budget;
thoroughly save, fight waste, strengthen financial discipline and discipline,
ensure national sustainability, security and financial safety. Third, continue to
innovate and organize the apparatus of the political system in a streamlined,
effective, and effective manner; promote the renewal of the financial
mechanism of public non-business units and public service prices. Fourth,

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promote restructuring, equitization and divestment of state capital in
enterprises; improve the operational efficiency of state corporations and
corporations; ensure state budget revenue estimates. Fifth, sustainable
development, safe and smooth operation of financial markets and financial
services,

3.2. Monetary Policy

Firstly, continue to implement monetary policy in the direction of

stimulating economic growth by continuing to encourage the provision of
capital sources to support production and promote exports as planned, reserve
capital for the Policy Bank, and contribute funding for Xaysomboun
Development Fund through the Ministry of Finance.
Second, continue to set the exchange rate under the new mechanism along with
adjusting the system to survey the situation of foreign exchange buying and
selling exchange rates more accurately and fully to narrow the exchange rate
difference between the Kip and the foreign exchange rate. USD of the bank and
the market (October 31, 2021, the USD/Kip difference between the bank and
the free market is 13.36% and the Baht/Kip difference is less than 1 %).
Third, continue to coordinate with relevant sectors to take handling
measures against individuals and organizations dealing in foreign currency and
other forms of financial business that do not comply with regulations.
Fourth, monitor the implementation of the management regime between
commercial banks and money exchange points according to the issued
regulations.
Fifth, continue to review and perfect the law on foreign exchange
management in order to support the implementation of the national program on
solving difficulties of the economy and finance such as managing foreign
exchange business activities, opening financial accounts, etc. account and use
foreign currency accounts, manage foreign exchange earnings.

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 Sixth, continue to implement the mechanism to manage revenue from
export of goods in the pilot project of mining and exporting minerals through a
specific management account to concentrate foreign currency in the banking
system; building a legal corridor, supporting the provision of financial services
in the railway station area and service units related to the Laos-China railway
project, in special economic zones.
Seventh, continue to prepare for the transformation of "Policy Bank" into
"Rural Development Bank".

3.3. Coordination of monetary and fiscal policy in several countries

The rapid and complicated developments of the Covid-19 epidemic have

caused many adverse impacts on the world economy. The disruption of the
global supply chain due to the break of the most important link, China, along
with a series of decisions to blockade and isolate each region, each city, even
each country, have affected the overall growth rate. as well as pushing the
global economy to the brink of recession. Not only the flow of goods and labor,
but also the flow of services and finance that seemed to be immune to the
epidemic thanks to the Industrial Revolution 4.0 were also stopped by the fear
of the epidemic. For the first time in modern times, the world economy is
subject to both supply shocks and demand shocks at the same time from global,
national, city, to community and household scale. The change in spending and
travel habits of consumers leads to production stagnation, increased
unemployment, the risk of default, bankruptcy of businesses and risk aversion,
even panic. of financial investors.
The Organization for Economic Co-operation and Development (OECD)
forecasts global economic growth in 2020 at only 2.4%, down 0.5% from the
previous forecast. According to estimates of the International Monetary Fund
(IMF), global GDP growth is only -3% GDP, in which, ASEAN GDP growth
will be -0.6%; The US is - 5.9%, the UK is - 6.5% and the euro area is -7.5%.

9
Developing economies will lose about 2% of GDP instead of the continuous
average growth rate of 4.6%/year during the previous 60 years. The IMF also
forecasts that the cumulative loss of the world economy due to the Covid-19
epidemic will reach 9 trillion USD in 2021. APEC's prediction confirms that
the growth of 21 member economies will decrease to about -2, 7% 2020.
According to the World Bank (WB), growth in developing countries in East
Asia and the Pacific under the baseline scenario will decrease to 2.1% and
under the case scenario. The lower growth rate will drop to -0.5% in 2020,
compared with the forecast of 5.8% in 2019. China's growth is forecast to slow
to 2.3% under the baseline scenario and under the scenario. The low-case
version will drop to 0.1% in 2020, compared with 6.1% in 2019.
To reduce the negative impacts of the Covid-19 epidemic in the recent
period, in general, all countries have loosened monetary and fiscal policy
through continuously cutting interest rates as well as launching support
packages. huge support to revive the economy stalled due to the quarantine
order and infected workers.
In response to the Covid-19 epidemic, the US Federal Reserve Bank
(FED) continuously cut the basic interest rate to 0% within just a few days in
the first half of March 2020 with huge money injection packages. up to trillions
of dollars into the economy, which is reeling from the epidemic. On March 3,
the FED cut interest rates by 0.5 percentage points, the biggest drop since
December 2018. This is the first time the Fed has decided to cut interest rates
outside of a formal meeting since the 2008 financial crisis and the fifth
emergency rate cut in 50 years. Then, on March 15, the Fed announced the
second interest rate cut in the context of the Covid-19 epidemic spreading to
many states in the US. Accordingly, the FED lowered interest rates by one
percentage point to the target range of 0-0.25%, in the face of concerns that the
epidemic will affect economic activities soon and pose risks to the economic
outlook.

10
 The Bank of England (BoE) on March 11 cut interest rates by 50 basis
points to 0.25% to boost the UK economy. This is the first time the BoE has
decided to cut interest rates since August 2016. According to the BoE, although
the extent of the damage from the economic shock caused by the Covid-19
epidemic is not clear, economic activity in the UK could decline over the next
few months.
In Canada, the Central Bank on March 13 announced to lower the key
interest rate by 50 basis points, to 0.75%. On March 27, this bank continued to
announce to lower the key interest rate to 0.25%. Meanwhile, the Reserve Bank
of New Zealand, on March 16, announced a 75-basis point cut in interest rates,
to 0.25%. The Reserve Bank of Australia, on March 19 officially cut the basic
interest rate from 0.5% to 0.25%, the lowest level in the country's history. The
Central Bank of Malaysia has cut interest rates to the lowest level since 2010,
while Hong Kong (China), Saudi Arabia, the United Arab Emirates (UAE)
have also cut interest rates across the country. customary. The Bank of Korea
(BoK) on March 16 lowered interest rates by 0.5 percentage points to a low of
0.75%, helping to mitigate the impact of the Covid-19 epidemic and financial
instability in the market. this national school. This is the first emergency rate
cut by the BoK in more than 10 years. Then, on May 28, the BoK dropped
another 0.25 percentage points to a record low of 0.5%.
Not only cutting interest rates, major central banks around the world also
restarted quantitative easing (QE) programs with a much larger scale than
before to pump money directly into the economy. Accordingly, the Fed
committed to buy 750 billion USD of Treasury bonds and mortgage securities;
The ECB also launched a new QE package with a scale of up to 750 billion
euros ($820 billion), bringing the size of the agency's asset purchases this year
to 1.1 trillion euros, equal to about 6% of GDP. area. On March 2, the Bank of
Japan provided 500 billion yen ($4.6 billion) in support to ensure sufficient
liquidity in the system. The People's Bank of China also provided 800 billion

11
yuan (about 115 billion USD) and equivalent to 0.8 percent of GDP to banks
with the requirement that banks use to let companies hit hard by the virus.
Covid-19 pandemic loan. In addition, banks are required to assist companies
with mature loans.
In addition to easing monetary policy through interest rate cuts and QE
programs, in many countries central banks have coordinated with the finance
ministry to implement intervention plans with clearer goals such as delaying,
tax cuts, fees and huge economic stimulus packages to support sectors of the
economy affected by the Covid-19 epidemic.
The Australian government has announced a $23 billion economic
stimulus package that includes tax breaks for small businesses, wage subsidies
for apprentices and a one-time cash payment to social welfare recipients. The
UK announced a huge economic relief package worth £330 billion, equivalent
to 15% of GDP, an emergency cut in interest rates from 0.75% to an all-time
low of 0.25%. France injected 45 billion euros into the economy. Spain
mobilized the largest economic resources in history with a rescue package of
200 billion euros, accounting for about 20% of GDP. New Zealand spends NZD
12.1 billion, equivalent to 4% of GDP, to support production and business,
enhance welfare for the elderly, low-income families and pay for workers who
cannot travel. because of social isolation. The US has approved a $2.2 trillion
relief package, under which the American people will receive up to $3,000 per
household depending on their income level, and $500 billion in support for
industries severely affected by the Covid-19 epidemic. $-19, $350 billion for
small businesses, $250 billion for unemployment assistance and at least $100
billion for the health system. The Fed announced that it will provide $ 4 trillion
to support people, businesses and local governments to overcome the fight
against Covid-19. In Japan, the government will tap the remainder of this year's
fiscal budget reserves of about 270 billion yen ($2.62 billion) to use for
economic support packages.

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 Governments have also taken a series of measures to help companies
reduce the cost burden of disrupted operations. For example, Italy offers tax
credits to companies with a 25% drop in revenue and has approved a 750-
billion-euro liquidity package to support businesses. Switzerland announced a
new financial support package worth more than 30 billion USD, aimed at
independent small businesses, single-member companies and employees.
Canada through a $52 billion program, subsidizing up to 75% of wages for
struggling businesses. In addition to a support package worth $ 2 trillion, the
US government asked Congress to add a new loan of $ 250 billion for small
businesses when there are 17,500 companies with a staff size of about 500
employees. Apply for a loan through local banks. In Asia, Singapore plans to
reduce corporate income tax including tax relief on commercial property.
Meanwhile, South Korea provides cash to small companies struggling to pay
salaries. In China, the government has asked landlords to cut rents and give
private-sector landlords subsidies to follow suit.
According to a report by the International Labor Organization (ILO),
81% of the workforce is affected by the total or partial closure of the workplace
due to the Covid-19 epidemic. The number of unemployed people worldwide
could increase to 24.7 million people, based on the number of unemployed
people available in 2019 of 188 million people. Therefore, along with measures
to support businesses, national governments also take measures to protect
workers by preventing layoffs and maintaining stable income. Specifically, the
Chinese government has enacted a temporary cut to social security
contributions. Meanwhile, Japan subsidizes the wages of those forced to take
time off to care for children or for sick relatives. Singapore announced cash
benefits for affected employers. In addition, facing the possibility that the
epidemic could last for many months, some countries have focused on long-
term measures. For example, the Thai Ministry of Graduate Training, Science,
Research and Innovation is organizing vocational training programs for about

13
40,000 people who have lost their jobs due to the Covid-19 epidemic at a cost
of 4.5 million USD. Extracted from the 2020 budget, the Australian Department
of Education has also announced a financial support package for Australian
students to attend short courses to reorient and supplement the labor shortage
in some fields. area.
It can be said that, to reduce the impact of the Covid-19 epidemic, many
countries have coordinated to loosen fiscal policy with monetary policy through
making commitments to monetary stimulus and increase government spending,
but the results have been achieved not good. The reason is that the current crisis
arising from the pandemic has led to the stagnation of national economies and
the world economy in general, production stagnation due to disruption of the
global supply chain, affecting the global economy. to supply input materials
and consume output products. When the economy is affected by both aggregate
supply and aggregate demand shocks, it is not easily resolved by fiscal stimulus
packages and monetary policy easing.

3.4. Some recommendations for Vietnam

In Vietnam, the Covid-19 epidemic has had a strong impact on all fields
of the economy - society, mainly on the three aspects of growth, investment,
and trade; disruption of important production value chains; The decline in
consumption has a great impact on services and tourism. According to the
General Statistics Office, in the first 4 months of the year, the whole country
had 37.6 thousand newly registered enterprises with a total registered capital of
445.2 trillion VND and a total number of registered employees were 315.7
thousand employees, a decrease of 13.2% in the number of enterprises, a
decrease of 17.9% in the registered capital and a decrease of 29.7% in the
number of employees over the same period last year. The average registered
capital of a newly established enterprise in 4 months reached VND 11.8 billion,
down 5.5% over the same period last year. If including 680 trillion dong of

14
additional registered capital of 11.7 thousand enterprises changing capital, the
total additional registered capital into the economy in the first 4 months of the
year is 1,126 trillion dong, down 20.4 % compared to the same period last year.
To support the economy, the Government, relevant ministries, agencies, sectors
and organizations have implemented many positive measures with a focus on
coordinating the two groups of monetary policy and fiscal policy to remove
difficulties and create favorable for businesses in terms of access to capital,
credit, finance, tax, commerce, and electronic payment. The Government has,
is and will continue to have many policies to support businesses and people
affected by the pandemic, such as directing the development and
implementation of monetary support packages (about 300,000 billion VND),
financial support packages, etc. financial support (about 180,000 billion VND),
social security support package (over 62,000 billion VND), electricity price
support package (about 12,000 billion VND), telecommunications price
support package (about 15,000 billion VND) and about 20,000 billion VND of
taxes, fees and charges for businesses and people. The focus and roadmap of
support packages are implemented in order of priority such as social security
support, fiscal support and credit support; focus on implementing measures to
support businesses with specific measures as follows:
The State Bank of Vietnam (SBV) has issued Circular 01/2020 on
rescheduling of debt repayment, exemption and reduction of interest, and
retention of loan groups to support customers affected by the Covid-19
epidemic.; Directive 02 CT-NHNN on urgent solutions of the banking industry
to strengthen prevention, control and overcome difficulties caused by the
impact of the Covid-19 epidemic. Commercial banks have twice reduced
payment service fees for customers, with the amount done so far is about 1,000
billion VND. From March to May 2020, the State Bank of Vietnam (SBV)
sharply reduced the operating interest rate twice, creating favorable conditions
for credit institutions to reduce lending interest rates, contributing to removing

15
difficulties, promoting business recovery, and minimizing impacts. impact of
the Covid-19 pandemic.
The Ministry of Finance has drafted and submitted to the Government
for promulgation a Decree on extension of tax payment and land rent for those
affected by the Covid-19 epidemic to contribute to removing difficulties for
production and business, providing tax support. income of small and medium
enterprises, exemption and reduction of taxes, fees and charges, temporary
suspension of payment of social insurance, no interest and penalty for late
payment. Specifically, according to Decree No. 41/2020/ND-CP, about
740,000 businesses, accounting for 98% of the number of businesses in
operation, will benefit from the policy of extending tax payment and land rent
with an estimated amount. about 180 trillion VND. In addition, the Ministry of
Finance has submitted to the Government and settled according to its
competence import tax exemption for medical equipment in service of
epidemic prevention; submit to the Government to amend Decree No.
122/2016/ND-CP, Decree No. 125/2017/ND-CP and Decree No.
134/2016/ND-CP on import and export tax to remove difficulties for
enterprises. The industry operates in the fields of leather, footwear, textiles,
agro-forestry-fishery processing, mechanical engineering, agriculture,
supporting industries and automobile industry. It is expected that when these
decrees are issued, there will be an additional 6,000 billion VND of investment
capital back to businesses. At the same time, the Ministry of Finance has
submitted to the Government a proposal to the National Assembly on deciding
the level of implementation of the corporate income tax policy for small and
micro enterprises, effective from July 1, 2020. If this policy is approved, about
700,000 businesses, accounting for about 93% of the total number of businesses
operating nationwide, will benefit. Thereby, reducing the obligation to pay the
budget in 2020 of these enterprises by about VND 7.8 trillion. In addition, the
Ministry of Finance has also coordinated with other sectors to review, reduce

16
and exempt many types of fees and charges with a total estimated amount of
VND 500 billion.
According to the World Bank's assessment, the Vietnamese government
has actively controlled all situations, so the Vietnamese economy is still
resilient to external shocks. In the first quarter of 2020, Vietnam's growth
reached 3.82%, the lowest level in the past 11 years but the highest number
among countries with data available to date. According to the World Bank, with
policy space in hand, Vietnam is in a strong position to overcome the ongoing
health and economic crisis. Vietnam is also in a strong position to benefit from
free trade agreements with a forecasted growth rate of 7.5% in 2021 and around
6.5% in 2022 thanks to external demand. improved, service sector consolidated,
and agricultural production gradually recovered (WB, 2020). Although the
medium-term prospect of Vietnam's economy according to the WB's opinion is
quite good, difficulties and challenges are still great, so Vietnam's policy
orientation in the immediate period should pay attention to the following
issues.:
Firstly, it is necessary to continue to coordinate well fiscal policy and
monetary policy to reduce the negative impacts of the Covid-19 epidemic.
The current decline in economic growth is caused by the epidemic and social
isolation measures to prevent epidemics, so the usual loosening of monetary
and fiscal policy does not help much in boosting production and creating
economic growth. employment during periods when workers are forced to stay
at home. The fact that the efficiency is not high when loosening monetary
policy and monetary policy in some countries in the recent period shows that
the global economy and global financial markets can only be restored when
production and business activities are carried out. resumed and that can only
happen when the epidemic is under control. In the current situation, the
Government should implement fiscal measures to support the public health
response and provide special social assistance to the most vulnerable.

17
Specifically, the Government should consider continuing the subsidy programs
for health services to reduce stress, help support disease control, expand the
social safety net towards reducing the burden. partly for households whose
income has decreased due to the epidemic's impact, and at the same time,
support to find jobs to help workers reintegrate into the economy after the
epidemic.
Second, it is necessary to continue taking measures to facilitate
businesses and households to access credit more easily to help them overcome
difficulties and stabilize consumption.
Credit institutions need to balance, fully and promptly meet capital needs
for production and business, speed up reform of administrative procedures,
shorten the time for loan application approval, and improve customers' access
to loans; promptly apply support measures such as restructuring the repayment
term, considering loan interest exemption and reduction, maintaining the same
debt group, reducing fees, etc., for customers facing difficulties due to the
impact of the Covid-19 epidemic.
Third, it is necessary to develop a contingency plan for the post-Covid-
19 period.
After the Covid-19 epidemic was brought under control and production
recovered, national economies in particular and the world economy in general
faced the risk of a global financial crisis. Huge economic stimulus packages
from national governments as well as the banking system and international
financial institutions can directly increase the inflation rate. Huge debts will put
pressure on many countries' economies. The bad debt ratio of the banking
system is also expected to increase when many businesses cannot get up
because of the epidemic. There is no room for loosening monetary policy
because interest rates have dropped to very low levels, even in many countries,
interest rates are still negative. The loosening of fiscal policy is also difficult to
continue when many countries have had to accept to increase their budget

18
deficits to deploy bailout packages. Therefore, Vietnam needs to consider
making appropriate and timely policy adjustments.
In summary, Vietnam's monetary policy and fiscal policy should still
prioritize macroeconomic stability and inflation control, in which measures to
relax, defer taxes, fees and debt to support businesses and people to reduce their
financial burden more important than cutting interest rates and/or devaluation
of VND. In addition, it is necessary to ensure that the support programs can
target the right audience and the right needs in order to properly solve the
problems that businesses, households and individuals face due to the impact of
the Covid-19

CONCLUSION
Thus, monetary, and financial policy, especially its tools, play a very
important role in the market economy in general and Vietnam's economy. The
use of such tools will have a great influence on the development of the economy
at a particular time. In Vietnam, which is in the process of transitioning to a
market economy, the application of monetary and financial policy tools always
requires appropriateness and effectiveness. In the early years of the new period,
the application of direct regulatory tools played a particularly important role in
controlling inflation and promoting economic growth. However, recently, they
have clearly revealed their limitations when the economy entered a new stage
of development. Meanwhile, the indirect adjustment tools have just been put
into use and have not really been fully promoted, or their role has not been
clearly demonstrated due to many reasons associated with the actual strength
of the economy. That requires us to have the right orientations and solutions in
perfecting those tools. To achieve this, besides the correct orientation of the
Party and State, it is necessary to have a synchronous development of the
capacity of the State Bank, the commercial banking system... and many other

19
synchronous coordination. considered a long-term process and should be
further developed.

20
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