Vietnam Monetary Policy


SBV cuts rates again to stimulate economy

On 25 March, the State Bank of Vietnam (SBV) reduced its key refinancing rate for the seventh consecutive meeting, cutting it by one percentage point to 8.0%. In addition, the SBV also lowered the discount rate to 6.0% from 7.0%. Finally, the Bank cut the rate cap on short-term dong deposits to 7.5% from 8.0% and reduced to 11.0% the short-term lending rate for several priority sectors, namely exporters, farmers, small and medium enterprises as well as high-tech firms.

Monetary authorities continue to ease their stance in an effort to support growth, as the Vietnamese economy grew a relatively modest 5.0% in 2012, the slowest expansion seen in 13 years, and aided by moderating inflation, which fell to its lowest level in six months in March.

A majority of Consensus Forecast panellists expect the SBV to raise the refinancing rate to 8.17% in 2013. Panellists see the Bank increasing rates further next year to 8.75%.


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