The document discusses the roles and monetary policy of the State Bank of Vietnam. It outlines the bank's main roles as promoting monetary stability, supervising financial institutions, and providing banking facilities. It also discusses the bank's goals of maintaining external and internal balance through managing foreign exchange rates and keeping inflation within a target band. The bank uses open market operations and manages interest rates and money supply to influence economic activity and prices.

1. PART 2: Monetary Policy Chapters 12:250-252, 256-259 & 17:373-374

2. State Bank of Vietnam

7. External Balance r M s0 M D M 0 r 0 M p AD 0 Y 0 p 0 RGDP AS D FX0 Quantity Exchange rate e 0 S AUD0

9. External Balance r M 0 M s0 M D r 0 M p Y 0 p 0 RGDP AS AD 0 Quantity Exchange rate S AUD0 e 0 D FX0

14. Internal Balance – Contractionary Policy A policy aimed at increasing interest rates and to restrict AD D AUD0 Quantity Exchange rate S AUD e 0 Q 0 r M 0 M s0 M D r 1 r 0 M p Y 0 p 0 RGDP AS AD 0

15. Internal Balance – Expansionary Policy Policy aimed at reducing interest rates and raising the level of AD. Quantity Exchange rate e 0 Q 0 D AUD0 r M s0 M D M 0 r 0 M p AD 0 Y 0 p 0 RGDP AS S AUD0

17. Application Question 11 Suppose you are the monetary policy adviser for the government. The economy is experiencing a large and prolonged inflationary trend. What change in open market operations would you recommend?

19. Review