UEH announced the first Financial Conditions Index (FCI) in Vietnam

31 Jan, 2018

In the morning of January 5, 2018, at Campus 59C Nguyen Dinh Chieu, the workshop: Financial Conditions Index FCI – Measurement and Application in Vietnam was organized by the School of Finance - UEH

Attending the workshop were Prof. Nguyen Dong Phong - President; Assoc. Prof. Phan Thi Bich Nguyet - Vice President; Prof. Nguyen Trong Hoai - Vice President; Assoc. Prof. Nguyen Huu Huy Nhut - Vice President; Dr. Truong Van Phuoc - Acting Chairman of National Financial Supervisory Commission. In addition, the workshop welcomed a great number of scientists, experts, lecturers and media agencies.

Currently, in Vietnam, several economy estimating indicators, namely GDP credit growth, movement of interest rates, exchange rate, budget deficit and bad debt ratio were announced, analyzed and evaluated separately. In reality, just only taking use of a few financial tools to reflect financial conditions will result in inexact signs, affecting the effectiveness of planning and operating economic policies or deciding on expenditure and investment.

FCI is an integrated indicator that reflects the overall financial conditions of the economy over time as well as the impact of financial conditions on the outlook of the economy in the short term and long term. In addition, financial institutions and the central banks in many countries in the world have also been trying to build FCI.

Speaking at the opening of event, Assoc. Prof. Dr. Phan Thi Bich Nguyet - Vice President emphasized: “FCI is the first economic indicator in a series of indicators which has been studied and will be announced in next time, expressing the voice and the outlook of UEH to important social-economic issues. This is one of the missions and visions of UEH”.

At the workshop, on behalf of the research team of the School of Finance, Assoc. Prof. Dr. Nguyen Khac Quoc Bao - Dean of School of Finance announced the research result of FCI in Vietnam in the period of Q4/2002 - Q1/2017. The research team of the School of Finance - UEH estimated the FCI based on selected models and methods and standardized data according to international practise and reliable data (datastream). Notably, the team’s findings have shown that the FCI closely reflects the development of the financial system and the real economy. Therefore, this index will be very useful for the policymakers, businesses, investors and the public in understanding and forecasting the economic outlook by identifying signs of tightening or loosening of financial conditions, and then provide necessary and timely regulatory policies for the government or help to make decision in financing, investment, consumption and savings for enterprises, investors and the general public.

With important meanings and widespread potential application, the research team of the UEH plan to announce this index every quarter for various partners; as well as update with better results to become a macro-policy recommendation indicator from UEH.

Media coverage of the event:

VGP News - Online newspaper of the Socialist Republic of Vietnam (baodientu.chinhphu.vn)

VITV Television

HTV - Hochiminh Television;

Vietnam Financial Times (VFT)

Plus Business Newspaper

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