Vietnam interest rate unlikely to fall further: experts
Interest rates in Vietnam are unlikely to decrease further and may even rise slightly in the near future, according to Pham The Anh, chief economist at the Vietnam Economic and Strategy Research Center (VESS).

Pham The Anh, chief economist at the Vietnam Economic and Strategy Research Center (VESS) speaks at a seminar inn Hanoi, December 16, 2024. Photo courtesy of VPBankS.
Speaking at the "Steady Amidst Storms" seminar in Hanoi on Monday, Anh, who is also head of the Department of Economics at the National Economics University (NEU), explained that current interest rates stand around 6%, lower than the pre-pandemic levels of 7-8%.
He emphasized that interest rates in Vietnam are closely tied to domestic inflation, which is expected to remain at around 3-4%.
"Inflation in Vietnam cannot be as low as in developed countries due to wage pressures, rising real estate prices, and the eventual pass-through of these costs to consumer goods. With interest rates at 6% and inflation at 4%, there is little room for further rate cuts if we want to maintain positive real interest rates," he said.
Additionally, Anh noted that Vietnam is attempting to balance its interest rate and exchange rate policies. The VND/USD exchange rate in recent years has been influenced by trade deficits and the interest rate differential between Vietnam and global markets. While Vietnam has successfully reduced its trade deficit, last year’s interest rate gap created exchange rate volatility, leading to capital outflows.
Another factor that could impact Vietnam’s economic outlook is Donald Trump’s tariff policies, according to Anh. When Trump was elected the U.S. president and is expected to introduce tariffs, the USD appreciated as investors anticipated that the tariffs would reduce the U.S. trade deficit, thereby decreasing the supply of dollars on foreign exchange markets.
While Trump claimed that tariffs would not burden American consumers, Anh argued that manufacturers would ultimately pass the costs onto consumers, prolonging inflation in the U.S. This, in turn, could delay interest rate cuts in the U.S., prompting central banks in the U.S.’s trade partners to slow down their own rate reductions to prevent excessive currency depreciation.
Echoing, Tran Hoang Son, market strategy director at VPBank Securities (VPBankS), commented that stabilizing interest rates in 2025 would be a favorable outcome.
He noted that the State Bank of Vietnam has been flexible in managing interbank interest rates and absorbing excess liquidity through the issuance of treasury bills, helping to stabilize the exchange rate. However, if exchange rate fluctuations or inflationary pressures emerge in mid-2024 or beyond, there may be a slight uptick in interest rates.
Regarding Vietnam’s stock market, Son pointed out that the VN-Index, which represents the Ho Chi Minh Stock Exchange, has established a trading range between 1,200 and 1,300 points this year.
Unless external factors such as exchange rates or foreign net selling pressures improve significantly, he expects the market to stay within this range until at least the first quarter of 2025. Foreign investor selling may continue, but not at the levels seen earlier.
Pham The Anh emphasized that while Vietnam’s stock market status being ugraded in the coming time is crucial for attracting foreign capital, it is not the only factor.
Stable economic growth and favorable U.S. interest rate policies - particularly whether the U.S. Federal Reserve can reduce rates significantly to around 2% - will play a key role in shaping the investment climate. However, he cautioned that the outlook for U.S. interest rates depends on domestic inflation, labor market conditions, and the stability of global commodity prices.
He highlighted the importance of global tariff policies in determining the flow of foreign capital. If trade tensions can be resolved and retaliatory policies avoided, foreign investment may return to Vietnam.
“Currently, asset markets are highly valued, with the U.S. stock market at a relatively high valuation. The Vietnamese stock market, by contrast, has great potential due to its low valuation. At some points, capital inflows to the U.S. may slow, interest rates will decrease, and foreign capital could shift towards emerging markets like Vietnam, which is undergoing significant reforms,” Anh concluded.
Vietnam's economy is expected to grow 6.8-7% this year, surpassing the National Assembly’s target. For 2025, the legislature has set a GDP growth target of 6.5-7%, with an ambitious goal of reaching 7-7.5%. Prime Minister Pham Minh Chinh has also emphasized that macroeconomic stability will remain a priority, with a growth target of around 8% in 2025.
Anh described the 8% GDP growth target for 2025 as optimistic, suggesting that a rate of approximately 6.5% would be more realistic.
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