Signals of “loosening” monetary policy to boost growth

ANTD.VN - Although it has not lowered its operating interest rate, the State Bank seems to be sending a message of "loosening" monetary policy to promote economic growth.

State Bank sends out "loosening" signal

According to experts, Vietnam's economy still has a long way to go to reach its 2025 growth target, so it needs more stimulus and requires more drastic measures in both fiscal and monetary policies.

Looking at monetary policy, we are currently in a new context not only in Vietnam but also globally when monetary policies of countries are changing and the signals of easing are quite clear.

According to Mr. Tran Ngoc Bau, CEO of WiGroup Financial Economic Data Company, in Vietnam, the operator has sent a signal of easing through two quite drastic actions on both "fronts": the interbank market and the 1 market.

Specifically, in mid-February, the State Bank of Vietnam (SBV) reduced the interest rate on treasury bills and has now stopped issuing treasury bills. This implies that the operator is hoping to bring the interbank interest rate to a very low level, or may allow the interbank interest rate to run within a range greater than 0 - 4% instead of being rigidly blocked as before.

Banking system liquidity is quite abundant, despite the decrease in deposit interest rates.

According to Mr. Bau, this is a proactive decision by the operator even when the exchange rate and the Fed's decisions are unclear.

In market 1, the State Bank also "blew the whistle" on banks raising deposit interest rates recently, resulting in deposit interest rates decreasing quite rapidly.

According to Mr. Tran Ngoc Bau, the State Bank will certainly lower interest rates, the important thing is how quickly and how much depends on the story of foreign capital flows.

He predicted that the State Bank will gradually reduce interest rates according to the roadmap: Step 1 will affect the interest rate of treasury bills; Step 2 will affect the OMO interest rate; Step 3 will affect other interest rates in market 1, most likely the deposit interest rate ceiling for terms under 6 months. And Step 4 will affect more stimulating interest rates such as refinancing interest rates, overnight funding interest rates...

According to him, this is a journey and must be done step by step and the State Bank is doing quite well in that journey.

According to Mr. Nguyen Hoang Linh - Research Director, Vietcombank Fund Management Company (VCBF), in Vietnam, the level of interest rate transmission from market 2 to market 1 has certain limitations and is not completely direct and immediate. However, when conditions are sufficient and external risks are reduced, the State Bank can completely reduce the operating interest rate.

Regarding the real interest rate for investment, experts expect that if the trade situation is more stable, the hoarding of foreign currency will be much less than in the past, the State Bank can buy USD to increase foreign exchange reserves and at the same time supply a certain amount of VND to the market. That will help increase liquidity and create conditions for real interest rates to decrease for businesses.

At the same time, if public investment really accelerates this year, it is clear that that amount of money will return to the system and help further support the liquidity of the banking system.

Decisive interest rate reduction

The State Bank of Vietnam also affirmed that in 2025, it will manage credit and monetary policy appropriately. According to Deputy Governor Dao Minh Tu, the State Bank of Vietnam sets a credit growth target of 16%, but encourages banks to promote credit effectively.

"If inflation is still controlled at 16%, the banking system remains stable and safe, and there are no worrisome issues, the State Bank is ready to further loosen the limit," the Deputy Governor emphasized.

The Deputy Governor also affirmed that the State Bank always ensures liquidity for banks. When liquidity is guaranteed, banks do not need to push up deposit interest rates.

In the coming time, the State Bank will be more flexible in using tools, especially refinancing, as well as participating in the interbank market to resolve capital in the secondary market. The management agency also affirmed that it will continue to operate interest rates stably and in a downward direction.

In fact, with the drastic solutions of the State Bank, the interest rate level has decreased significantly, both deposit interest rates and lending interest rates. Since February 25 (ie the time the State Bank met with banks to request a reduction in deposit interest rates according to the Prime Minister's direction), about 23 banks have reduced lending interest rates.

According to the State Bank, in 2023, the average lending interest rate decreased by 1.3% compared to the beginning of the year. In 2024, the average lending interest rate decreased by 1.4%. In 2025, from the beginning of the year until now, the lending interest rate has decreased by 0.8%.

Along with the interest rate reduction, the State Bank also said it would manage exchange rates and the foreign exchange market stably. Currently, domestic foreign exchange resources are still balanced, with at least 100 billion USD in State foreign exchange reserves; FDI and foreign capital flows into and out of Vietnam are still relatively balanced.

Source: https://www.anninhthudo.vn/tin-hieu-noi-long-chinh-sach-tien-te-de-thuc-day-tang-truong-post606833.antd