The implementation of WTO commitments will strongly affect the financial market, especially the capital market, according to economic experts. The process will also impose new challenges in controlling inflows of international capital within the domestic market and improving fierce competitive capacity with foreign financial groups. VOV interviewed Nguyen Dai Lai, deputy head of the Banking Strategy Department of the State Bank of Vietnam.

Reporter: How has Vietnam carried out financial liberalization in the context of WTO commitments?

Mr Lai: The financial liberalisation includes liberalisation of the monetary market and the capital market. The liberalisation of the monetary market has achieved successful results over the past 10 years. For example, 10 years ago, the State Bank of Vietnam (SBV) fixed interest rates. But since June 2002 SBV has only needed to announce basic interest rates on which commercial banks and credit organisations will decide their own interest rates. In November 1999, Vietnam removed management of fixed exchange rates and shifted to management of exchange rates according to the market.

Reporter: What is the biggest challenge in management of financial sources since the country opened the financial market?

Mr Lai: The challenge is that each level of liberalization will result in a respective level of risk. The opening of the financial market will depend on our capability to control risks. This requires technology, management skills and international practices. If we quickly open the financial market to receive short-term capital sources, or disburse foreign indirect investment before being provided with long-term capital sources and foreign direct investment, we have to pay the price. At that time, short-term capital sources will be released if there are market changes or crises in the financial market.

Reporter: Can you compare Vietnam’s opening of its financial market with that in other regional countries?

Mr Lai: In the past three years, Vietnam’s commitments to open its financial market have been put into practice. This showed the country’s high speed in its efforts to open the market. We also did it in an appropriate way. First called for foreign direct investment and since later 2006 we have appealed to foreign indirect investment in the country.

Reporter: Thank you very much.