Vietnam Central Bank Strategizes for Economic Fortification

Vietnam's central bank will continue adopting flexible monetary strategies, maintaining its principal policy rates. The bank has urged commercial banks to reduce both deposit and lending rates as part of its efforts to stimulate economic growth. This direction was established in the first meeting held by newly appointed SBV Governor Pham Duc An with senior commercial bank officials. The policy adjustments come in response to external pressures such as the Middle East tensions, increasing oil prices, and domestic capital demands.

The policy includes keeping the primary interest rates at the same level, providing credit institutions access to affordable funding to support economic growth. Commercial banks have also been tasked with lowering lending rates to assist businesses and invigorate the economy. Additionally, the SBV promises timely liquidity support via flexible open market operations and tools like foreign exchange swaps and refinancing loans.

The SBV has set a 15% credit growth target for 2026, prioritizing loans for key sectors like production and agriculture while maintaining careful oversight over high-risk areas like real estate to mitigate bad debt risks. Furthermore, the bank plans to manage exchange rates and markets flexibly, absorb external shocks, synchronize policy instruments, and stabilize macroeconomic conditions. The year-to-date total credit growth stood at 2.65% by the end of March, amounting to 19.08 million billion dong ($724.92 billion), while Vietnam aims to sustain an inflation rate under 4.5% for the current year.