Orienting the roadmap to liberalize capital transactions

The project aims to determine the roadmap for opening capital flows in accordance with the goals and orientation of the State's economic structure, Vietnam's socio-economic conditions and international commitments that Vietnam is negotiating or has signed related to the capital flow liberalization roadmap, contributing to promoting the attraction of foreign capital, closely monitoring capital flows in and out of the territory, ensuring macroeconomic stability, sustainable growth, and minimizing negative impacts. against fluctuations in international capital flows. Completing the state management mechanism on managing capital flows in and out of Vietnamese territory...

Regarding the principle of building a roadmap, the Decision clearly states that Vietnam's orientation to liberalize capital transactions is not bound by the requirements of international commitments that Vietnam has signed. Vietnam can proactively build an orientation to liberalize capital transactions on the basis of: The inevitable trend of integrating international investment activities; compatibility with the level of readiness of the economy, the level of development and openness of the financial system; compatibility with Vietnam's management and competitiveness capacity.

Vietnam's roadmap for liberalizing capital transactions needs to aim at supporting the effectiveness of investment activities and the synchronization of macro policies, aiming to promote the development of the domestic capital market to promote all domestic and foreign resources for economic development, ensure safety and macroeconomic stability, strengthen supervision and forecasting of capital flow fluctuations, and create an equal and transparent environment between domestic and foreign investors.

In the roadmap to liberalize capital flows, policies need to aim at: Minimizing administrative interventions; Switch to applying economic measures that affect the interests of subjects to adjust capital flows such as tax policies, interest rates,...; enhance the effectiveness of macro-safety monitoring measures (reporting information regime, early warning, account monitoring,...);  Research additional support policies to improve the convertibility of the Vietnamese Dong through deeper participation in international capital transactions.

The liberalization roadmap needs to carefully evaluate the risks of liberalizing each specific capital flow, thereby taking preventive measures that are not contrary to international commitments, ensuring the ability to protect against economic shocks, limiting instability and crises caused by uncontrolled capital flow fluctuations.

The roadmap for liberalizing capital transactions does not necessarily mean specifically determining the opening time for specific capital flows. The policy to open capital flows needs to be flexible according to the actual conditions of the economy at the time and specific circumstances.

Strictly and cautiously control investment capital abroad

The project also provides basic orientation for the roadmap to liberalize capital transactions, in which, for capital transactions in foreign investment activities in Vietnam, focusing on improving the quality of capital flows through consolidating the legal document system, perfecting the reporting and information sharing mechanism among management agencies.

For capital transactions in investment activities abroad, in the condition of prioritizing the concentration of capital for socio-economic development, continue to orient strictly and cautiously control capital invested abroad. In case market conditions are favorable and the economy continues to grow steadily, it is possible to consider expanding the subjects allowed to invest indirectly abroad, loosening technical barriers on the basis of still ensuring macroeconomic stability, avoiding negative impacts on the international balance of payments and the foreign exchange market.

For the convertibility of the Vietnamese Dong, focus on implementing solutions to stabilize the macroeconomy, improve the balance of payments, and enhance the competitiveness of the economy. In the context of stable and sustainable macroeconomic conditions, supporting factors in the financial, monetary and foreign exchange markets are strengthened, considering developing policies to improve the convertibility of the Vietnamese Dong in the international market such as allowing the use of Vietnamese Dong to invest abroad with capital-receiving countries that have investment and payment agreements in local currency with Vietnam, allowing Vietnamese Dong to participate in overseas lending transactions in case the Borrower has the need to use loans in Vietnamese Dong for direct paymentto beneficiaries in Vietnamese territory or clearing payments to third parties in Vietnamese Dong.

Building a roadmap for capital flow liberalization needs to be done simultaneously with the overall development of risk prevention and legitimate defense measures to minimize adverse impacts, uncertainties and risks in the economy, including: Group of risk prevention measures before the crisis; group of legitimate defense measures.

As Correct