HANOI (Reuters) – Vietnam will maintain a flexible monetary policy aimed at controlling inflation, while authorities will monitor U.S. President-elect Donald Trump’s policies to adjust domestic policies accordingly, its central bank said on Tuesday.
Bad debts have been on an upward trend, and Vietnam’s bond and stock markets are facing difficulties, as is the real estate sector, despite signs of recovery, central bank deputy governor Dao Minh Tu said at a regular press briefing.
Vietnam’s manufacturing-led economy grew 7.09% last year to $476.3 billion, outpacing growth of 5.05% in 2023, official data showed on Monday. Growth was driven by strong exports and strong inflows of foreign investments.
But despite the momentum, economists say weaknesses remain in the banking and real estate sectors, with loan growth below target.
There he said that non-performing loans are under control and that commercial banks operate stably. Bank loans were up 15.08% as of December 31, and the central bank was targeting loan growth of 16% this year, he added.
The central bank is dealing with struggling lender Saigon Joint-stock commercial bank (HM:) (SCB), he said, adding that the takeover of the two weak banks by private lenders would be completed before the Lunar New Year. In October, the central bank said it would merge two more major banks.
The State Bank of Vietnam launched an unprecedented bailout of SCB last year after it was embroiled in the country’s biggest financial fraud. Reuters reported in April that SBV had pumped in $24 billion in “special loans” to stave off its collapse.
Pham Chi Quang, head of the central bank’s monetary policy department, said the Trump administration’s policies will be closely watched.
The United States is the main destination for Vietnamese exports and Trump has promised to impose new tariffs on imports.
Quang said foreign exchange policy will “remain flexible” in line with global factors.
“We will continue to stabilize interest rates and the exchange rate amid difficulties in 2025. It is a challenging task for SBV in the coming time, but we are confident that we can control the market,” Quang said.
The Vietnamese dong is currently trading near its all-time lows against the dollar.
