Which State Bank of Vietnam (SBV) policy decisions most clearly demonstrate the resolve to safeguard macroeconomic stability without affecting growth momentum?

Pham Thanh Ha

Last year was exceptionally challenging for macroeconomic management and for the conduct of monetary policy by the SBV in particular, as global economic and financial conditions continued to evolve in complex and unpredictable ways, with many developments beyond earlier forecasts.

Geopolitical instability, compounded by tariff policies adopted by major economies, further heightened global economic uncertainty. Alongside these external pressures, Vietnam’s economy has also had to contend with a range of internal challenges.

In this context, the SBV has remained steadfast and flexible in its conduct of monetary policy, seeking to balance multiple critical objectives: controlling inflation, maintaining macroeconomic stability, supporting economic growth, stabilising money and foreign exchange markets, keeping interest rates at reasonable levels, and facilitating access to bank credit for businesses and the public at appropriate costs.

At the same time, monetary policy has been implemented in close coordination with fiscal policy and other macroeconomic policies, with swift and responsive actions closely aligned with developments in both the global and domestic economies.

In parallel, credit management measures have been carried out effectively, channelling credit flows into production and business activities, priority sectors, and key drivers of economic growth in line with government directives, while strictly controlling credit to potentially risky sectors.

Thanks to the synchronised implementation of monetary policy measures, lending interest rates have continued to trend downward. As of November 2025, the average lending rate for newly originated loans stood at 6.96 per cent, per annum, broadly unchanged from the end of 2024, enabling businesses and individuals to access credit at lower costs than before.

The foreign exchange market has operated smoothly, with legitimate foreign currency needs of the economy being fully and promptly met. The USD/VND exchange rate has moved flexibly in line with market conditions.

As of December 31, outstanding credit to the economy exceeded $743 billion, up 19 per cent compared with the end of 2024. The credit structure was aligned with the overall economic structure, effectively meeting the borrowing needs of both households and businesses.

Payment activities and digital transformation have accelerated strongly, delivering a wide range of conveniences and enhancing customer experience in using banking services on digital platforms.

Through these efforts, the banking sector has made a positive contribution to driving the country’s socioeconomic development outcomes. Macroeconomic conditions have remained broadly stable, and inflation has been kept under control.

For the year as a whole, the consumer price index rose by 3.31 per cent compared with the previous year, meeting the target set by the National Assembly. GDP growth in each subsequent quarter was higher than the preceding one, with full-year 2025 growth estimated at 8.02 per cent, placing Vietnam among the world’s top performers, meanwhile major economic balances were ensured.

On this basis, it can be said that the SBV’s monetary policy management in 2025 had effectively fulfilled its role as a pillar in maintaining macroeconomic stability and controlling inflation, thereby creating an essential foundation to support sustainable economic growth.

What is the most effective way to coordinate monetary and fiscal policy to both stabilise the macroeconomy and generate growth momentum?

Monetary and fiscal policies are critically important tools that government use to manage macroeconomic stability. Monetary policy plays both direct and indirect roles in economic growth. The management of interest rates, exchange rates, and credit affects consumption, investment, and exports, thereby directly supporting growth, while inflation control creates a favourable environment for production and business activities, attracts foreign direct investment, and underpins sustainable economic growth.

In Vietnam, as well as leveraging international experience, monetary policy needs to prioritise its long-term objective of controlling inflation and maintaining macroeconomic stability. Fiscal policy, through government spending, public investment, and tax adjustments, has a more direct impact on consumption, investment, foreign investment attraction, and exports, and thus on aggregate demand and economic growth.

Moreover, another important role of budgetary spending in supporting growth operates through implementation of public projects that help pull in private investment, create jobs, and stimulate consumption.

Alongside monetary and fiscal policies, policies aimed at developing capital markets, including equity and bond markets, also serve as the backbone of the economy. They help mobilise medium- and long-term capital efficiently for businesses and the government to invest in production and infrastructure, encourage economic growth, and reduce dependence on bank credit. In doing so, they contribute to more efficient resource allocation and create stronger conditions for innovation, moving towards a diversified, transparent, and safe financial system.

Over recent years the coordination between monetary policy and fiscal policy, along with other macroeconomic policies, has been expedited in a close and concerted manner by the SBV and relevant ministries and agencies.

The SBV has been working closely with the Ministry of Finance (MoF) and related bodies to effectively deploy fiscal and monetary measures, exchanging information on developments in the money market, the government bond market, state treasury cash management, and the placement of term deposits by the State Treasury at commercial banks.

This has helped strengthen coordination between monetary and fiscal policy management in pursuit of the objectives of inflation control, macroeconomic stability, and support for economic growth.

At the same time, the SBV has coordinated with the MoF in improving the legal framework for policies on the development of the stock market and the government bond market.

The positive outcomes of monetary policy in maintaining macroeconomic stability and enhancing Vietnam’s external standing have served as an important basis for international organisations to upgrade the country’s sovereign credit ratings. This, in turn, has facilitated the successful issuance of government bonds by the MoF in both domestic and international markets, while also attracting foreign investors to participate in the market.

Entering the 2026-2030 period, in order to materialise socioeconomic development goals, it is necessary to continue close coordination and mutual support among monetary policy, fiscal policy, and other macroeconomic policies. This will help maximise policy effectiveness and achieve the objectives of maintaining macroeconomic stability, controlling inflation, boosting growth, and ensuring major economic balances.

In the context where monetary policy space is currently assessed to be very limited, priority should be given to expanding fiscal policy in a focused and targeted manner, positioning it as a key pillar to drive economic growth, stabilise the macroeconomy, and provide effective support to monetary policy.

At the same time, efforts need to be intensified to encourage the safe and sustainable development of capital markets so that they become the primary channel for medium- and long-term capital supply to the economy, thereby ensuring adequate funding for high growth in the period ahead.

Which pillars will the SBV prioritise in respect to monetary policy to both safeguard macroeconomic stability and support sustainable growth?

In 2026, the global and regional economies are forecast to continue facing multiple risks, including subdued growth, geopolitical volatility, increasing fragmentation of global trade, climate change, and the rapid pace of digital transformation.

Vietnam’s highly open economy will be directly affected, while it is a must to achieve high economic growth alongside the maintenance of macroeconomic stability.

In this context, monetary policy will continue to strengthen coordination with fiscal policy and other macroeconomic policies to maintain macroeconomic stability, control inflation, and reinforce major economic balances, particularly during a phase in which innovation and digital transformation have yet to translate into rapid productivity gains.

The SBV will continue to closely monitor developments to manage interest rates in line with market conditions, macroeconomic developments, inflation, and monetary policy objectives. It will further direct credit institutions to cut operating costs, strengthen the application of IT and digital transformation, and execute other measures to reduce lending interest rates.

Exchange rate management shall remain flexible and aligned with market conditions, coordinating with other monetary instruments to stabilise the foreign exchange market, thereby contributing to ensuring macroeconomic stability and inflation control. Simultaneously, the SBV will continue to direct credit institutions to pursue effective credit growth, channelling credit into production and business activities, priority sectors, and key drivers of growth in accordance with the government directives, while strictly controlling credit to potentially risky sectors.

Efforts will be intensified to review and simplify credit procedures, apply digital transformation to credit appraisal and disbursement processes, and create further refinements for households and businesses to access bank credit, while ensuring prudence and safety.