CaliToday (16/12/2025): Amidst global economic volatility and shifting trade currents, the State Bank of Vietnam (SBV) continues to play a critical role in anchoring the nation’s economy. The SBV is currently adhering to a prudent and proactive monetary policy, focusing squarely on controlling inflation and ensuring exchange rate stability. This approach is paramount to creating a predictable and robust environment for sustained business operations and foreign direct investment (FDI).
The Dual Mandate: Inflation Control and Exchange Rate Stability
The SBV’s cautious stance is guided by two primary objectives essential for macroeconomic health:
1. Proactive Inflation Management
While Vietnam’s inflation has generally been well-managed compared to many developed economies post-pandemic, persistent global supply chain disruptions and volatile energy prices require vigilance.
Targeted Tools: The SBV utilizes a combination of tools—including open market operations (OMO), reserve requirements, and the adjustment of key policy rates—to manage liquidity in the banking system.
Preventing Spirals: The main focus is to prevent imported inflation from translating into a sustained domestic price spiral, thus protecting the purchasing power of consumers and the profit margins of businesses. Maintaining inflation within the National Assembly's target (typically around 4-4.5%) is a key performance indicator.
2. Exchange Rate Stability (VND/USD)
The stability of the Vietnamese Đồng (VND) against major currencies, particularly the US Dollar, is crucial for trade-dependent economies like Vietnam.
Mitigating External Shocks: As the US Federal Reserve (and other major central banks) adjusts interest rates, global capital flows can become erratic. The SBV intervenes judiciously to smooth out sharp fluctuations that could undermine importer/exporter confidence and increase the cost of foreign debt.
Supporting Export Competitiveness: A stable exchange rate allows businesses to plan long-term export contracts without significant currency risk, reinforcing Vietnam’s position as a reliable global manufacturing hub.
Fostering a Stable Business Environment
The consistent and clear communication of the SBV’s monetary policy provides crucial certainty for the business community:
Investor Confidence: Foreign investors highly value the stability of the policy framework. The SBV’s predictability reduces the risk premium associated with investing in Vietnam, making it more attractive for FDI, especially in high-value sectors.
Reduced Borrowing Costs (Relief Measures): In recent periods, the SBV has often signaled willingness to maintain or even adjust policy rates slightly downward to support economic growth when inflation risks are deemed manageable. This typically involves instructing commercial banks to lower lending rates to ease pressure on enterprises struggling with slow market demand.
Credit Growth Management: The central bank sets specific credit growth targets for commercial banks annually. This ensures that credit is channeled into productive sectors (such as manufacturing and infrastructure) while limiting excessive lending to speculative areas like real estate, thereby reducing systemic financial risk.
Looking Ahead: Balancing Growth and Caution
The current cautious stance is seen as a necessary balancing act. While global demand remains soft, the SBV must continue to ensure that there is enough credit available to stimulate domestic consumption and investment, without allowing liquidity to fuel inflation.
This commitment to macroeconomic stability is arguably Vietnam’s most powerful non-tariff barrier against global turbulence, providing the necessary foundation for achieving its long-term development goals.