Tag: monetary policy

The overarching goal is to stabilise the macro-economy, curb inflation, and promote GDP growth to reach 8.3%–8.5% in 2025.

Monetary policy management successfully supported economic recovery in 2024 but the new year will pose continued challenges from global uncertainties, inflation risks, and limited policy flexibility.

The State Bank of Vietnam (SBV) believes that inflationary pressure is tending to increase. The 2022 figure is expected to exceed 4 per cent, posing challenges in control efforts next year. Cutting lending interest rates will also face difficulties, due to deposit rates and the USD/VND exchange rate both tending to increase.

Agriseco believes that about 70 per cent of stocks in the VN30 group are now at attractive prices. With macro-economic stability and growth, now is the time to gradually accumulate long-term investments. However, it also believes that the market still faces many risks, such as pressure from inflation and exchange rates, continuing tightening of monetary policies, and rising interest rates.

A report from Brand Finance puts growth in Vietnam’s national brand value in 2022 at 11 per cent, rising from $388 billion to $431 billion. Vietnam has emerged as an attractive destination for foreign investment thanks to its successful fiscal and monetary policies as well as investment in human capital.

At a government meeting on the morning of September 22, Prime Minister Pham Minh Chinh said that, in the context of an unpredictable global situation, monetary and fiscal policy orientations must be effective and coordinated closely with other policies to stabilize the macro-economy. He asked the State Bank of Vietnam (SBV) to research and raise the operating interest rate and the deposit rate but to try to keep the lending rate stable.

The interbank VND interest rate fell sharply during the week of August 8-12 from a large volume of bills maturing and money being pumped back into the market, resulting in the difference between VND and USD interest rates becoming negative. According to SSI Securities, the State Bank of Vietnam is implementing a relatively flexible monetary policy via open market operations in order to balance inflation, exchange rates, and interest rates.

Vietnam’s inflation rate will come in at 2.25 per cent for the opening months of 2022, which is controllable, State Bank of Vietnam (SBV) Governor Nguyen Thi Hong told the third session of the 15th National Assembly on June 8. The rise mainly stems from higher prices for goods globally. Therefore, until the end of the year, monetary policy must closely follow the disbursement of recovery packages to avoid an impact on inflation.

The use of monetary policy to support the economy is now nearing its limit. Analysts therefore believe that banks will have to find a balance between profit growth and asset quality control this year in the context of lower net interest margins (NIM). Bank profits are forecast to grow by 19 per cent in 2022, down from 25 per cent in 2021.