Central bank on verge of further easing monetary policy: expert
The State Bank of Vietnam (SBV) may continue to ease monetary policy with inflation well under control, said Nguyen Xuan Thanh, a lecturer at the Fulbright School of Public Policy and Management.
He said inflation fell from 4.9% in January to 4.3% in February, and is forecast to further decrease this month.
“From now to May, if inflation continues to remain below 4.5%, it will offer favorable conditions for the SBV to further ease monetary policy,” he said.
According to Thanh, the SBV has been buying up foreign currencies to increase its reserves after selling about $27 billion late last year to support the USD/VND exchange rate.
“If the Vietnamese dong remains stable and the central bank increases its foreign currency reserves and pumps out VND, this will be an opportunity for Vietnam to relax monetary policy tightening. However, we still need to be cautious," the lecturer noted.
Many experts said the central bank’s recent move to cut policy interest rates signals an easing of monetary policy, and deposit and lending interest rates are expected to cool.

The State Bank of Vietnam may continue to ease monetary policy with inflation under control. Photo by The Investor/Trong Hieu.
Previously, the SBV announced a 1 percentage point reduction on several policy interest rates to bolster the economy and aid businesses.
From March 15, the annual rediscount rate fell from 4.5% to 3.5%, while the overnight electronic interbank rate and interest rate for loans to offset capital shortfalls in clearance between the central bank and domestic banks dropped from 7% to 6%.
The maximum short-term lending interest rate in Vietnamese dong for priority sectors was also cut from 5.5% to 5% per year, while the maximum short-term lending rate in Vietnamese dong at public credit funds and microfinance institutions was brought down from 6.5% to 6% per year. Immediately after the SBV's announcement, interbank interest rates fell sharply.
According to SBV data, the average overnight inter-bank lending interest rate in Vietnamese dong on March 22 fell to 1.55% per year - the lowest level since mid-July 2022. It more than halved compared to the end of the previous week and was 4.85 percentage points lower than its peak recorded in early March.
Similarly, interest rates for one-week, two-week and one-month terms plunged to 1.98%, 2.26% and 4.44% per year, respectively.
In recent days, a series of commercial banks including OceanBank, BaoVietBank and Kienlongbank have adjusted their deposit interest rates to below 9%. Currently, only ABBank and Saigon Commercial Bank (SCB) are offering 12-month deposit interest rates from 9% per year.
Deposit interest rates at the four largest state-owned banks, Vietcombank, BIDV, VietinBank and Agribank, now average 7.2% for 12-month terms.
Notably, some banks have changed their base interest rates, which are used to calculate lending rates.
On March 22, Techcombank applied a new base interest rate for loans to buy real estate and cars, or build and repair houses, of 9.4% per year.
Meanwhile, the rate for loans of 12 months or less at Saigon-Hanoi Bank (SHB) now stands at 10.7%-10.9 per year.
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