U.S. tariffs, volatile Fed policy, and global market uncertainty complicate Vietnam’s push for double-digit growth in 2026.

Vietnam’s ambition to accelerate economic growth to more than 10% next year is facing mounting external pressure, as global monetary tightening and geopolitical trade risks make policy calibration increasingly difficult, senior officials from the State Bank of Vietnam (SBV) warned this week. The comments underscore the growing challenge for export-driven Southeast Asian economies navigating a fragile global recovery.

Speaking at a quarterly press conference in Hanoi on December 29, Pham Chi Quang, head of the SBV’s Monetary Policy Department, said unpredictable developments in global markets—particularly U.S. tariff policy and the U.S. Federal Reserve’s interest-rate trajectory—are complicating Vietnam’s macroeconomic management. These external shocks, he noted, are already affecting capital flows, the foreign-exchange market, and exchange-rate stability.

Vietnam’s government has reaffirmed confidence that the economy will surpass 8% growth in 2025, one of the strongest performances in Asia, and has set an ambitious 10%+ target for 2026 as part of its long-term development strategy. However, the central bank’s remarks signal that sustaining such momentum will require increasingly delicate policy coordination.

SBV officials emphasized that monetary policy next year will be managed “flexibly,” with closer alignment to fiscal policy to balance growth support against inflation control and financial stability. For Vietnam, this balancing act is critical: the economy remains heavily dependent on bank credit to fuel investment, consumption, and industrial expansion.

Deputy Governor Pham Thanh Ha revealed that as of December 24, credit growth had surged 19.41% year-on-year, highlighting the central role of lending in driving economic output. He said strong credit expansion has been a key contributor to Vietnam’s rapid growth this year and will remain essential if the country is to reach double-digit expansion in 2026.

For global investors, the message is mixed. Vietnam continues to stand out as one of Asia’s fastest-growing economies and a major beneficiary of supply-chain diversification. Yet its growth outlook is increasingly exposed to forces beyond its control—from U.S. interest rates and tariffs to shifting global capital flows.

The bigger question now is whether Vietnam can fine-tune monetary policy tightly enough to shield its economy from global volatility—while still pushing growth into the rare territory of double digits in an uncertain world economy.

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Source: Vietnam Insider

The State Bank of Vietnam (SBV) has announced two decisions to further reduce operating interest rates, effective from May 25, 2023.

The first decision, numbered 950/QD-NHNN, focuses on the interest rates for refinancing, rediscounting, overnight interbank electronic payment, and compensatory lending for capital shortfall in offset payments by SBV to credit institutions (CIs). Under this decision, the interest rate for overnight interbank electronic payment and compensatory lending for capital shortfall in offset payments by SBV to CIs has been reduced from 6.0% per annum to 5.5% per annum. The refinancing interest rate has been lowered from 5.5% per annum to 5.0% per annum, while the rediscounting interest rate remains unchanged at 3.5% per annum.

The second decision, numbered 951/QD-NHNN, concerns the maximum interest rates for Vietnamese Dong (VND) deposits of organizations and individuals at credit institutions, as stipulated in Circular No. 07/2014/TT-NHNN dated March 17, 2014. According to the decision, the maximum interest rate for non-term and term deposits of less than one month remains unchanged at 0.5% per annum. The maximum interest rate for deposits with terms from one month to less than six months has been reduced from 5.5% per annum to 5.0% per annum. However, the maximum interest rate for VND deposits at the People’s Credit Fund, microfinance institutions, has been lowered from 6.0% per annum to 5.5% per annum. The interest rate for deposits with terms of six months or longer will be determined by the CIs based on market supply and demand for capital.

The State Bank of Vietnam’s decision to further decrease operating interest rates aims to stimulate economic growth, support liquidity in the interbank market, and provide favorable conditions for borrowing and lending activities within the banking system. These measures are expected to encourage investment and consumption, contributing to the overall stability and development of the Vietnamese economy.

The SBV reassures the public and the banking sector that it will continue to closely monitor market developments and adopt appropriate monetary policies to maintain macroeconomic stability and ensure the efficient functioning of the financial system.

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Source: Vietnam Insider

The Vietnam News Agency has reported that the State Bank of Vietnam, the country’s central bank, has taken punitive measures against several of the 11 commercial banks that were inspected for issues related to investments in corporate bonds.

Following snap inspections into the banks’ investments in corporate bonds, the central bank has aimed to ensure compliance with the law and reduce the banks’ exposure to risks. The central bank has not disclosed the names of the banks that violated the regulations.

According to current regulations, banks are prohibited from purchasing corporate bonds and are not allowed to sell the bonds to their subsidiaries.

In the previous year, the central bank conducted 1,420 inspections, with 385 of them being unannounced.

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Source: Vietnam Insider

Deposit interest rates in the market have simultaneously decreased by a sharp 1-2% a year compared to the peak period (around November 2022). Businesses expect that this move will reduce lending interest rates in the near future to help support production and business.

Recent statistics from the State Bank of Vietnam (SBV) showed that the average deposit interest rate in Vietnam dong (VND) of domestic commercial banks at the end of December 2022 was at 0.2-0.6%/year for demand deposits and terms of less than 1 month; 5.3-5.8%/year for deposits with terms from 1 to 6 months; 6.2-7.6%/year for terms from 6 months to 12 months; and terms ranging from 12 months to 24 months were 6.0-7.4%/year. It can be seen that deposit interest rates have decreased compared to October and November 2022.

The report from Bao Viet Securities (BVSC) also showed that deposit interest rates were almost flat in January 2023 and showed signs of cooling down from the end of the month. Analysts at SSI Securities Company said that deposit interest rates for terms of more than 6 months have tended to decrease at some banks, with a decrease of around 0.5%. Currently, the deposit interest rates of popular banks are at 8-9.5% with ordinary deposits.

Similarly, the savings deposit interest rate applied from February 14 for individual customers at Sacombank is no longer anchored at the interest rate of 9%/year as last month. Currently, the deposit interest rate at Sacombank counters is 5.5-6%/year with a term of 1-5 months; 8-8.3%/year with a term of 6-11 months, and 8.4-8.65%/year with a term of 12-36 months. MSB also reduced deposit interest rates by 0.2-0.4%/year in some terms.

With the online channel, the interest rate for 15-36 month terms decreased by 0.4%/year to 9%/year; 12-month-term interest rates also decreased by 0.4% to 8.9%/year; and for a term of 6-11 months, the interest rate dropped to 8.8%/year. Notably, after the meeting with the SBV on February 8th, a number of large commercial banks met and agreed to reduce deposit interest rates in order to reduce lending rates.

With such signals, and the pressure to support the exchange rate ease, experts from BVSC believe that the pressure to raise interest rates will subside in 2023. Instead, monetary policy this year is likely to move towards supporting growth. BVSC expects interest rates to fall again in 2023 with clearer signs from the second quarter when the US Federal Reserve (FED) stopped raising interest rates and Vietnam’s inflation cooled down.

In fact, high interest rates are a concern of businesses in this difficult period. Statistics of the SBV at the end of December 2022 showed that the average lending interest rate of domestic commercial banks for new and old loans with outstanding balances was at 9.0-10.7%/ year. The average short-term lending interest rate in VND for priority sectors is about 4.7%/year, which is lower than the maximum short-term lending rate prescribed by the SBV (5.5%/year).

The average USD lending interest rate of domestic commercial banks for new and old loans with outstanding balance is at 3.9-5.4%/year for short-term and 5.8-5.9%/year for medium and long-term. Meanwhile, according to the survey, the lending interest rate level of commercial banks in the market is currently lending popular interest rates is 12-13%/year for medium and long-term loans. The high lending interest rate has caused difficulties for production and business activities.

Therefore, right after deposit interest rates showed signs of cooling down, commercial banks made appropriate adjustments. MB Bank has applied a 1% reduction in lending interest rates for corporate customers with a turnover of less than 100 billion VND. BIDV also implemented a new short-term loan package with a scale of 30 trillion VND to serve production and business needs for customers, with preferential interest rates from 8%/year.

For customers who want to borrow money to buy houses or cars, consume or produce, and do business, BIDV has launched a new medium and long-term loan package with many incentives: loan interest rates from 10.3%/year in the first 12 months, and from 10.9%/year for 18 months from the time of first disbursement (for individual customers with medium and long-term loans under loan products for housing needs).

Specifically, when customers apply for medium and long-term loans at BIDV (loan period of more than 12 months), they will have the opportunity to receive additional incentives, including an additional 0.2% discount for home loan customers applying via the BIDV Home application or customers who receive their salary through BIDV.

Earlier, at the beginning of the year, Vietcombank was also the first commercial bank to announce a 0.5% reduction in lending interest rates for individual and institutional customers with existing and new outstanding loans at the bank, except for a group of clients operating in risky fields such as real estate, securities, etc.

@ NDO

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Source: Vietnam Insider

Vietnam will stick to a monetary policy that is “supportive for economic growth”, while closely monitoring inflation, the country’s central bank said on Tuesday.

The Southeast Asian country’s gross domestic product (GDP) growth in the second quarter quickened to 7.72% from an expansion of 5.05% in the first quarter, but authorities warned of challenges like rising inflation in the second half of the year.

“If inflation remains under control, the monetary policy will continue to be implemented in a way that is supportive for economic growth,” the State Bank of Vietnam told Reuters in an emailed statement.

Central banks across the world are raising their policy interest rates, some aggressively, to contain inflation that is hitting multi-decade highs in some countries.

Vietnam’s consumer prices in June rose 3.37% from a year earlier, led by an increase in the cost of food and energy. Vietnam aims to cap inflation at 4% for this year.

The central bank said it has kept its policy rates unchanged this year while helping local banks to increase their liquidity, “and this has helped businesses and the economy to have better access to bank loans.”

The central bank said it encourages financial institutions to cut costs to be able to lower their lending interest rates to support business activities, adding that it will ensure their liquidity by using open market operations.

“The central bank will closely monitor the domestic and international monetary market and the inflation situation to implement an interest rate policy that contributes to macroeconomic stability and inflation control,” it said.

Vietnam targets a GDP growth of 6.0%-6.5% this year, recovering from last year’s growth of 2.58%, the slowest pace in decades due to the pandemic.

@ Reuters

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Source: Vietnam Insider