Money in Vietnam
Vietnam - Money
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 - Money Data
|Money (annual variation in %)||17.7||16.2||18.4||15.0||12.0|
5 years of economic forecasts for more than 30 economic indicators.
Vietnam Money Chart
Source: Asian Development Bank.
|Bond Yield||3.38||-0.13 %||Dec 31|
|Exchange Rate||23,173||0.01 %||Jan 01|
Get a sample report showing our regional, country and commodities data and analysis.
Request a Trial
Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.
February 3, 2020
According to data released by IHS Markit, the manufacturing Purchasing Managers’ Index (PMI) registered 50.6 in January, down from 50.8 in December.
January 29, 2020
According to the General Statistics Office of Vietnam, consumer prices rose 1.23% in January over the prior month, down from December’s 1.40% increase.
January 29, 2020
Industrial production contracted 5.5% in January year-on-year, contrasting December’s 6.2% expansion.
January 2, 2020
According to data released by IHS Markit, the manufacturing Purchasing Managers’ Index (PMI) registered 50.8 in December, marginally below November’s 51.0 reading.
December 29, 2019
Industrial production rose 6.2% in December year-on-year, up slightly from November’s revised 5.5% expansion (previously reported: +5.4% in November year-on-year).