Monetary, exchange rate policies under mounting pressure: Vietnam central bank

The State Bank of Vietnam’s (SBV) monetary and exchange rate policies will face significant pressure in 2025, as both the global and domestic economic environments remain unpredictable, said Governor Nguyen Thi Hong.

Speaking at the government’s online conference with city and provincial leaders on Friday, Hong stated that the banking sector is determined to make breakthroughs for an economic expansion of at least 8% in 2025, creating momentum for higher growths in the coming years.

Along with the growth target, it is a must to control inflation, stabilize the macro economy, and maintain major economic balances, she added.

Hong noted that the global situation remains unpredictable, while the national economy has a high level of openness.

"Tentions and changes in trade policies will continue to intesify pressures on financial markets. Domestically, despite improvements, challenges persist, and businesses and citizens continue to face many difficulties."

Given these circumstances and the goal of rapid growth, the SBV governor outlined key priorities for the near future, including closely monitoring global and domestic economic developments to proactively introduce timely and suitable solutions to control inflation, stabilize the macro economy and the money market, and ensure the safety of the banking system.

"These are very important tasks - the foundation for sustainable economic growth," she stressed.

In 2025, the SBV set a credit growth target of around 16% and informed credit institutions at the start of the year so they can proactively make suitable plans. The central bank will also base on the inflation target of 4.5-5% to assess actual developments and make adjustments to the credit expansion target.

The governor noted that the issues of interest rates and exchange rates pose significant challenges. "These variables will impact both the domestic market and the flow of capital into and out of the economy. The SBV will closely monitor developments, even on a daily basis, to proactively adjust policies."

According to Hong, the central bank will continue to direct credit institutions to reduce costs to facilitate further interest rate reductions, thereby supporting businesses and citizens together with efforts in exchange rate management.

Additionally, it will continue to promote the diversification of payment services, encourage digital transformation, restructure the credit institution system, manage non-performing loans, and other key tasks.

She emphasized that to achieve the credit growth target, measures such as supporting small and medium-sized enterprises (SMEs) and offering loan guarantees for these businesses must be more effectively promoted.

"The current outstanding credit for the real estate sector is VND3,480 trillion ($136.34 billion), but many projects are encountering difficulties. Addressing these obstacles will help bring capital back to the banking system, thereby enhancing the effectiveness of credit operations," the governor added.