Interest Rate in Vietnam

Vietnam Interest Rate | Economic News & Forecasts

Vietnam - Interest Rate

State Bank of Vietnam joins the global easing wave in September to ward off growth risks

On 16 September, the State Bank of Vietnam (SBV) reduced four key interest rates by 0.25 percentage points each, including the refinancing rate, which now sits at 6.00%. The move took panelists by surprise, as the majority had seen rates unchanged until end-2019.

The SBV justified its decision by highlighting recent monetary easing by many central banks, led by the U.S. Federal Reserve. Global trade tensions have risen in recent months, presenting external downside risks to growth, while inflation sits comfortably below the 4% target for 2019, providing the Bank with leeway to trim rates to support the economy. That said, the impact of monetary loosening on economic activity could be limited given that most of the rates are largely decoupled from the market, meaning the impact on average market interest rates could be small.

Looking ahead, the SBV gave no explicit guidance on future rate movements. That said, given economic activity is still perky despite a more adverse external environment—and is seen remaining strong going in to 2020—further easing may not be required. Virtually all panelists see the Bank staying on hold for the rest of 2019, with a small minority of panelists expecting rates to remain unchanged until end-2020.

As economists at Fitch Solutions comment: “We expect the central bank to remain on hold over the coming months to observe the impact of its rate cut on the economy before making further adjustments”.

Last month, FocusEconomics Consensus Forecast panelists expected the refinancing rate to end 2020 at 6.19% and 2021 at 6.38%. A new Consensus Forecast will be published on 15 October, with forecasts likely to be revised down in light of the Bank’s recent move.

Vietnam - Interest Rate Data

2013   2014   2015   2016   2017  
Policy Interest Rate (%)7.00  6.50  6.50  6.50  6.25  

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Vietnam Interest Rate Chart


Vietnam Interest Rate
Note: Refinancing rate in %.
Source: State Bank of Vietnam.

Vietnam Facts

Value Change Date
Bond Yield3.38-0.13 %Dec 31
Exchange Rate23,1730.01 %Jan 01

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