Vietnam mulls policy rate hike amid surging U.S. inflation

By Minh Van
Thu, September 22, 2022 | 3:04 pm GTM+7

Prime Minister Pham Minh Chinh asked the State Bank on Thursday to consider raising its policy interest rates and deposit rates, while steadying lending rates.

The government leader made this instruction to the central bank (SBV) at a cabinet meeting in Hanoi, following the Fed’s latest benchmark rate hike of 0.75 percentage points to curb inflation in the U.S.

Chinh called on domestic banks to keep their lending rates stable to support the nation’s post-pandemic economic recovery, even to cut down rates for loans to some corporate borrowers in the recovery process.

The SBV's inflation target for this year is 4%. Photo by The Investor/Trong Hieu.

The SBV's inflation target for this year is 4%. Photo by The Investor/Trong Hieu.

SBV Governor Nguyen Thi Hong said the toughest economic challenge was to curb inflation. She added the central bank would sustain its measures to ensure macroeconomic stability, but such steadiness would not mean “unchanged”.

Vietnam's current policy rates are 2.5% for the discount rate and 4.0% for its refinance rate.

At the beginning of September, local banks raised their deposit rates, with the average hike in the range of 0.3-0.6 percentage points per annum, mainly for six- and nine-month terms. The highest hike was one percentage point.

The January-August consumer price index increased by 2.58% year-on-year, but inflation pressure remains heavy. Thus, the SBV would maintain its target on the banking system's credit growth cap at 14% for this year, Deputy Governor Pham Thanh Ha said last week.

The Asian Development Bank said Wednesday that increasing inflation in the U.S. and the EU has heightened inflationary pressure in Vietnam. However, Vietnam’s prudent monetary policy and effective price controls, especially for gasoline, should keep inflation in check at 3.8% in 2022 and 4% in 2023, unchanged from the ADB projection made in April’s Asian Development Outlook. The SBV's inflation target for this year is 4%.

Comments (0)
  • Read More
US firm Molex expands Vietnam facility with solar panel installation

US firm Molex expands Vietnam facility with solar panel installation

Molex, a U.S. manufacturer of electronic, electrical and fiber optic connectivity systems, has expanded its manufacturing facility in Hanoi with solar panel installation.

Industries - Sat, October 1, 2022 | 6:46 pm GTM+7

EVN, Trungnam Group hold talks on solutions for solar power usage deadlock

EVN, Trungnam Group hold talks on solutions for solar power usage deadlock

State-owned Vietnam Electricity (EVN) has asked Trungnam Group to put the 172-megawatt capacity portion without a pricing mechanism of its 450 MW solar farm in Ninh Thuan into the competitive power generation market.

Energy - Sat, October 1, 2022 | 3:54 pm GTM+7

Danish firm Spectre opens third Vietnam factory in An Giang

Danish firm Spectre opens third Vietnam factory in An Giang

Spectre, a Danish maker of functional garments for outdoor sports brands, started operating its $17 million factory in An Giang province Friday, the company’s third in Vietnam.

Industries - Sat, October 1, 2022 | 3:06 pm GTM+7

Foreign firm accountant gets death sentence in $9.6 mln corruption case

Foreign firm accountant gets death sentence in $9.6 mln corruption case

A Dong Thap province court on Friday handed a death sentence to Nguyen Trung Thanh, chief accountant of Filipino-invested Pilmico Vietnam, on corruption charges.

Society - Sat, October 1, 2022 | 2:43 pm GTM+7

Vietnam’s nation brand valued at $431 billion

Vietnam’s nation brand valued at $431 billion

Vietnam has seen the third biggest brand value gain over the course of the pandemic in absolute terms, up $184 billion year-on-year to $431 billion in 2022, says London-based Brand Finance.

Economy - Sat, October 1, 2022 | 11:22 am GTM+7

Fever cools, townhouse, villa segment turns lethargic in major cities

Fever cools, townhouse, villa segment turns lethargic in major cities

Liquidity in the townhouse and villa segment, once feverishly high in both Hanoi and Ho Chi Minh City, has been drying up in recent months.

Real Estate - Sat, October 1, 2022 | 9:50 am GTM+7

AES gets ministerial nod for 2,250 MW LNG power project in Binh Thuan

AES gets ministerial nod for 2,250 MW LNG power project in Binh Thuan

American energy corporation AES has received in-principle approval from the Ministry of Industry and Trade for its VND50,432 billion ($2.11 billion) Son My 2 LNG-to-power project in the south-central province of Binh Thuan.

Energy - Fri, September 30, 2022 | 9:24 pm GTM+7

Coro Energy operates pilot rooftop solar power project in Vietnam

Coro Energy operates pilot rooftop solar power project in Vietnam

Coro Energy has completed commissioning of its Vietnam rooftop solar pilot project, the UK-based energy firm announced Friday.

Energy - Fri, September 30, 2022 | 6:59 pm GTM+7

VN-Index pulls one back after five losing sessions

VN-Index pulls one back after five losing sessions

Vietnam’s benchmark VN-Index reversed a consecutive five session decline with a six-point gain Friday to close at 1,132 points.

Finance - Fri, September 30, 2022 | 6:30 pm GTM+7

Vietnam’s GDP growth to keep driving southern industrial property market: report

Vietnam’s GDP growth to keep driving southern industrial property market: report

The industrial and logistics market in Ho Chi Minh City, Dong Nai, Binh Duong, Long An, and Ba Ria-Vung Tau will continue to grow in 2022-2023 thanks to Vietnam’s resilient economic expansion, according to Cushman and Wakefield.

Real Estate - Fri, September 30, 2022 | 3:32 pm GTM+7

Vietnam needs bonded warehouses for US cotton imports

Vietnam needs bonded warehouses for US cotton imports

Building a Vietnam bonded warehouse for U.S. cotton would benefit both countries, Vietnam Textile and Apparel Association (Vinatas) chairman Vu Duc Giang said Friday.

Industries - Fri, September 30, 2022 | 3:19 pm GTM+7

Thai giant Central Retail eyes mall investment in Binh Thuan

Thai giant Central Retail eyes mall investment in Binh Thuan

Thailand's Central Retail is seeking opportunities to build malls and supermarkets in Binh Thuan province.

Industries - Fri, September 30, 2022 | 3:05 pm GTM+7

Vietnam Q3 unemployment lowest in 3 years

Vietnam Q3 unemployment lowest in 3 years

Vietnam's unemployment rate dropped 1.7 percentage points year-on-year to 2.28% in the third quarter, the lowest since 2020.

Economy - Fri, September 30, 2022 | 11:38 am GTM+7

Looking up HCMC’s highest high-end homes

Looking up HCMC’s highest high-end homes

Housing projects like The River Thu Thiem, Lumière Riverside, Grand Marina Saigon, and The Opera Residence are home to the most expensive penthouses in Ho Chi Minh City.

Real Estate - Fri, September 30, 2022 | 9:36 am GTM+7

VAFIE helps boost cooperation between Vietnam, India firms

VAFIE helps boost cooperation between Vietnam, India firms

Invest Global, an investment consultancy under the Vietnam Association of Foreign-Invested Enterprises (VAFIE), and a delegation of 15 Indian businesses have signed an agreement on boosting investment cooperation between the two countries.

Industries - Fri, September 30, 2022 | 8:05 am GTM+7

US dollar scales record high peak of VND24,000

US dollar scales record high peak of VND24,000

The exchange rate at Vietnamese commercial banks crossed VND24,000 per dollar Thursday, reaching a new peak that it had not scaled before.

Banking - Thu, September 29, 2022 | 9:45 pm GTM+7