• Prime minister asks lawmakers to remove 20 cabinet ministers
  • New government faces challenge of weak growth amid drought

Vietnam Prime Minister Nguyen Xuan Phuc nominated a Communist Party official as central bank chief in an overhaul of the government a day after he was chosen leader.

Le Minh Hung, a former deputy governor of the State Bank of Vietnam and No. 2 in the Communist Party administration office, was selected as governor of the central bank, according to a statement on the government’s website. Phuc, a sole nominee elected by the National Assembly on April 7, asked parliament to dismiss 20 cabinet members, including Governor Nguyen Van Binh.

Vietnam’s new leaders face a host of economic challenges, including a drop in agriculture production because of a crippling drought and sliding oil revenue. The government is also under pressure to enact reforms to comply with trade agreements and continue to build up the banking system.

Lawmakers will vote on Saturday on the nomination of Hung to the central bank position, which usually lasts five years. Binh was appointed governor in August 2011.

Reaching Vietnam’s 2016 economic growth target of 6.7 percent is the “biggest challenge” for the new government, Tran Hoang Ngan, a lawmaker, told the National Assembly on April 2. Vietnam is vulnerable to external shocks if it doesn’t continue to bolster its banking system and restructure state companies, International Monetary Fund Managing Director Christine Lagarde said in a March 18 interview.

Currency Devaluation

The State Bank of Vietnam devalued the dong for the second time in six months in January as currencies across Asia came under pressure. That may put pressure on inflation, which will probably average 3 percent in 2016, according to forecasts from the Asia Development Bank.

Phuc also nominated Truong Hoa Binh, former chief judge of the People’s Supreme Court, Vuong Dinh Hue, head of the Communist Party’s Economic Committee, and Trinh Dinh Dung, former construction minister, to be deputy prime ministers.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE