Vietnam interest rates under rising pressure to go north in 2024: central bank
Vietnam’s banking sector will face significant challenges in the near future, including mounting pressure for higher interest rates, amidst global economic uncertainty and domestic economic risks, says Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu.

Conference to outline the Vietnamese banking sector's tasks for 2025 in Hanoi, December 14, 2024. Photo courtesy of State Bank of Vietnam.
At the SBV’s conference to outline the banking sector's tasks for 2025 on Saturday, Tu said in 2024, amid high global interest rates, the central bank maintained its policy interest rates to help credit institutions access capital at lower costs, thereby supporting the economy.
The central bank also asked credit institutions to reduce operational costs to bring down lending rates and publicize average lending and deposit rates on their websites.
He noted that the foreign exchange and currency markets in 2024 faced significant, multifaceted pressures due to unpredictable global economic and political developments.
The USD surge, coupled with domestic challenges such as negative interest rate spreads between VND and USD in the interbank market at times and unfavorable supply-demand balances in foreign exchange, put further strain on the exchange rate.
In this context, the SBV continued to manage the exchange rate flexibly and used a range of monetary policy tools to ease exchange rate pressures and stabilize the market, Tu said.
According to reports on interest rates from commercial banks, the lending rates have decreased by approximately 0.96 percentage points per year since the end of 2023.
The SBV required credit institutions to closely monitor high-risk sectors, maintain stable deposit rates, and continue efforts to reduce lending rates by cutting costs, streamlining administrative procedures, and enhancing the application of digital technology.
As of December 13, credit growth in the economy had reached about 12.5% compared to the end of 2023, with a focus on priority areas like production and business.
The deputy governor also highlighted the SBV's proactive efforts to restructure the banking system, resolve bad debts, handle weak banks, and achieve positive growth of non-cash payment transactions.
Addressing the conference, Deputy Prime Minister Ho Duc Phoc asked the SBV to continue keeping a close watch on the global economic situation to ensure timely and effective monetary policy adjustments.
It should maintain stable and reasonable interest rates and exchange rates, control inflation, and manage credit to promote economic development, he stated.
“The central bank should align monetary policy with fiscal policy and other policies to ensure the safety of the banking system, reduce bad debts, and maintain macroeconomic balances,” Phoc stressed.
The Deputy PM noted that while streamlining its organizational structure, the SBV must ensure that the banking system operates smoothly to serve the economy without disruption.
The SBV and credit institutions were also required to continue providing effective capital support for businesses, especially small- and medium-sized enterprises (SMEs), and promote green financing for sustainable development.
Furthermore, it should strengthen inspection and supervision to promptly prevent violations, as well as ensure transparency, security and safety in banking operations, he added.
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