CaliToday (12/9/2025): The State Bank of Vietnam (SBV), the nation's central bank, has reaffirmed its commitment to stabilizing the volatile domestic gold market and reining in mounting inflationary pressures. In a clear message to markets and the public, the SBV has stated it will flexibly deploy a full suite of monetary policy tools, signaling its readiness to adjust key interest rates and the exchange rate as necessary to maintain macroeconomic stability.
This proactive stance comes amid significant fluctuations in the domestic price of gold, which often trades at a substantial premium over international rates, creating market distortions and encouraging speculation. Simultaneously, Vietnam, like many economies globally, is navigating the challenge of rising inflation, which threatens to erode the purchasing power of consumers and impact the cost of doing business.
A Dual Mandate: Taming Gold and Inflation
The central bank's strategy focuses on two critical fronts. Firstly, addressing the domestic gold market. The SBV aims to narrow the significant gap between domestic and world gold prices, a persistent issue that affects market confidence. The bank has indicated it will use its regulatory instruments to ensure the market operates in a stable and transparent manner.
Secondly, and more broadly, is the crucial task of inflation control. The SBV emphasized that its primary goal is to keep inflation within the government's target range. To achieve this, it will manage monetary policy with a high degree of flexibility.
The Central Bank's Toolkit
In its statement, the SBV outlined the core instruments at its disposal:
Flexible Monetary Policy Tools: The bank will actively use open market operations, reserve requirements, and other instruments to manage liquidity in the banking system, directly influencing the cost of credit and the overall money supply.
Interest Rate Adjustments: The SBV has explicitly mentioned its willingness to adjust its policy rates, such as the refinancing rate and discount rate. An increase in these rates would make borrowing more expensive, which can help cool down economic activity and reduce inflationary pressures.
Exchange Rate Management: For a trade-oriented economy like Vietnam, a stable exchange rate between the Vietnamese Dong (VND) and major world currencies is paramount. The central bank will continue to manage the exchange rate dynamically to control the price of imported goods and services—a key source of "imported" inflation—while supporting the country's export competitiveness.
The SBV's announcement is intended to reassure the public and investors that it is taking decisive action. The central bank's challenge will be to strike a delicate balance: implementing measures firm enough to control inflation and stabilize the gold market without unduly hindering the nation's strong economic growth trajectory. The market will be closely watching the SBV's subsequent actions and policy announcements.
