According to the SBV, global financial and monetary markets have continued to be heavily affected by geopolitical tensions and inflationary pressures in the opening months of 2026. Escalating military conflict in the Middle East has kept Brent crude prices on an upward trajectory, raising concerns about a resurgence of inflation across many major economies.
In response, major central banks, including the US Federal Reserve (Fed), the European Central Bank (ECB) and the Bank of England (BoE), have maintained a cautious monetary policy stance and kept interest rates unchanged at their meetings earlier this year. Some countries, such as Australia and the Philippines, have even raised interest rates during the first four months of 2026.
Against this backdrop, the US dollar has strengthened significantly, placing considerable pressure on exchange rates and domestic money markets. For an open economy such as Viet Nam’s, the risk of imported cost-push inflation is creating additional challenges for monetary policy management.
Domestically, the Government and the SBV remain committed to supporting businesses and promoting economic growth through lower lending rates. However, liquidity pressures have intensified as credit growth has outpaced deposit mobilisation. Outstanding credit has now exceeded 19 quadrillion VND (722 billion USD), while total deposits stand at nearly 18 quadrillion VND (684 billion USD).
This imbalance has prompted many commercial banks to raise deposit rates in an effort to attract funds. At certain points, effective interest rates for large deposits or long-term savings products climbed to as high as 8–9% per annum.
Economists warn that if deposit rates are allowed to rise unchecked, banks’ funding costs will increase, pushing lending rates higher and placing additional strain on businesses and the broader economy. In response, Pham Chi Quang, Director of the Monetary Policy Department at the SBV, said the central bank had implemented a range of coordinated measures to support liquidity and create conditions for lower lending rates.
Since 2023, the SBV has maintained its key policy rates unchanged, allowing credit institutions continued access to low-cost funding. When market interest rates showed signs of overheating in early 2026, the central bank stepped up liquidity support and deployed a range of monetary policy tools.
Specifically, the SBV injected substantial liquidity through open market operations and extended loan tenors to up to two months, compared with the previous one-to-two-week terms. Foreign exchange swap operations were also introduced to provide additional liquidity in Vietnamese dong for credit institutions. These measures helped ensure system-wide liquidity, ease interbank rates and gradually transmit lower costs to the retail market.
At the same time, the SBV issued a series of directives aimed at tightening oversight of deposit mobilisation activities and maintaining stable interest-rate levels.
Most recently, Official Dispatch No. 3972/NHNN-CSTT, dated May, 14 instructed regional branches of the SBV to inspect the implementation of interest-rate reduction policies at commercial bank branches. This was followed by Official Dispatch No. 4190/NHNN-CSTT, issued on May 21, which called for intensified inspections and strict penalties for violations.
Regional SBV branches are currently reviewing banks whose deposit and lending rates exceed market averages and conducting targeted inspections. Regional banking inspectorates have also been instructed to incorporate interest-rate supervision into their 2026 inspection plans to strengthen oversight of the rate reduction policy across the banking system.
Alongside administrative measures, the SBV has proactively adopted technical solutions to support liquidity and expand funding capacity within the banking sector. One notable development has been the continued strong growth in household deposits.
SBV data show that by the end of January 2026, household deposits at credit institutions had exceeded 10.38 quadrillion VND (405 billion USD), up approximately 46 trillion VND (1.7 billion USD) from the end of the previous year and reaching a record high. In contrast, deposits from businesses and economic organisations declined to just over 8 quadrillion VND (304 billion USD).
According to economic experts, the renewed rise in deposit rates at many banks, particularly for medium- and long-term tenors, has helped attract funds back into the banking system. The increase in household deposits also reflects a preference for financial security among consumers at a time when investment channels such as property, equities and gold remain volatile. In addition, stable banking-sector liquidity and the SBV’s flexible policy management have strengthened depositor confidence.
The measures introduced in recent years demonstrate the SBV’s determination to stabilise interest rates through a broad range of coordinated tools. However, experts argue that building the foundation for a sustainable long-term growth cycle requires more than lower interest rates alone, it also requires the comprehensive development of all components of the financial market.
Nguyen Van Than, a deputy of the National Assembly and Chairman of the Viet Nam Association of Small and Medium Enterprises (VINASME), said interest rates should be viewed within the context of market mechanisms and the operational realities of the banking sector.
Although the Government has introduced various support mechanisms, including the Small and Medium Enterprise Development Fund, the Technology Innovation Fund and the Credit Guarantee Fund, access to these resources remains challenging in practice. Than therefore called for more comprehensive measures to ease credit access for small and medium-sized enterprises, rather than focusing solely on reducing interest rates.
Many experts also believe that reducing pressure on the banking system and ensuring sustainable growth will require further development of capital markets and the mobilisation of medium- and long-term funding sources, thereby reducing the economy’s heavy reliance on bank credit.
“Monetary policy cannot shoulder the entire burden of supporting the economy on its own. It requires closer coordination with fiscal policy and capital markets. There are periods when monetary policy must play a greater role, but there are also times when fiscal policy and capital markets should contribute more significantly to supporting economic growth,” said Dr Le Duy Binh, Director of Economica Viet Nam.
