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Economic growth

Vietnam's Central Bank Eases Monetary Policy to Boost Economic Growth

Strategic Insights

— 2 min read

The State Bank of Vietnam (SBV) is taking steps to loosen monetary policy to stimulate economic growth, revising credit growth targets and encouraging interest rate cuts. However, experts warn that the stability of the foreign exchange rate plays a crucial role in determining the effectiveness of these measures. The Government has issued a resolution instructing the SBV to adjust the credit growth target in line with inflation and GDP growth goals. Additionally, the SBV has granted commercial banks more room to expand credit, and issued a new regulation that will benefit banks that acquire weak lenders. Despite these measures, experts emphasize that the extent of further monetary easing depends heavily on developments in the exchange rate, which has limited room for adjustment this year.

Key Takeaways:

  • The SBV has revised credit growth targets upward, aiming to support businesses and improve people's livelihoods.
  • The Government has instructed the SBV to direct credit institutions to lower costs and strive to reduce lending interest rates.
  • The SBV has granted several commercial banks greater room to expand credit and announced a 50% reduction in reserve requirement ratio for banks that undertake the mandatory acquisition of weak lenders.
  • Director of Financial Data Provider WiGroup TraoSSn Nga c Bau highlights that monetary policy is shifting towards further loosening to stimulate economic activity.
  • The SBV's regulation will benefit banks such as Vietcombank, MB, VPBank, and HDBank, which have absorbed weaker institutions like CB, OceanBank, DongA Bank, and GPBank.
  • The extent of further monetary easing depends heavily on developments in the exchange rate, which has limited room for adjustment this year.
  • SBV Governor Nguya ...n Tha "ng acknowledges the considerable challenges facing monetary policy, including inflation risks and foreign exchange pressure.

Statistics:

  • Credit growth target revised upward to 8.3 to 8.5 percentage points, up from 8 per cent earlier in the year.
  • Interest rate cuts encouraged to support businesses and improve people's livelihoods.
  • Reserve requirement ratio to be reduced by 50% for banks undertaking mandatory acquisition of weak lenders.
  • US dollar strengthened by 3.5% against the A'a "ng since the start of the year.
  • Only about 1% adjustment room remains for exchange rate fluctuations for the rest of the year.
  • Annual exchange rate fluctuations target around 4.5 percentage points.

Sources:

  • [ "Government issues Resolution No. 226/NQ-CP instructing SBV to adjust credit growth target." ] (Source: Government of Vietnam)
  • [ "SBV issues Circular No. 23/2025/TT-NHNN on mandatory acquisition of weak lenders." ] (Source: State Bank of Vietnam)
  • [ "WiGroup TraoSSn Nga c Bau comments on monetary policy shifts towards further loosening." ] (Source: WiGroup)
  • [ "Nguya ...n Tha "ng acknowledges challenges facing monetary policy." ] (Source: Government of Vietnam)
  • [ "Vietnam's GDP growth goal set at 8.3 to 8.5 percentage points." ] (Source: Government of Vietnam)
  • [ "US dollar depreciation rate against global currencies since early 2025." ] (Source: Global Exchange Rate)
  • [ "SBV Governor's statement on exchange rate pressure and monetary policy decisions." ] (Source: Government of Vietnam)

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