In the morning of April 6, 2025, Prime Minister Pham Minh Chinh chaired the regular Government meeting for March 2025 and the Government's virtual conference with the provinces to discuss many important matters. Governor Nguyen Thi Hong of the State Bank of Vietnam (SBV) attended and delivered a speech at the meeting.
SBV Governor Nguyen Thi Hong speaks at the regular Government meeting for March 2025
Assessing the international economic situation in the first Quarter of the year, SBV Governor Nguyen Thi Hong stated that the global economic growth had slowed down, with rising inflation risks due to the global trade tensions. Following President Trump's announcement of the reciprocal tariffs, JP Morgan has projected that the inflation in the US could rise by an additional 1.5%. Several central banks have suspended their interest rate cuts, and several major trading partners have announced their retaliatory tariffs against the US. This will undoubtedly lead to complicated developments of the financial and monetary situations both globally and domestically, creating pressures on the monetary policy, the exchange rate and the interest rate management, as well as the realization of the economic growth target of 8% or higher in 2025.
In terms of the monetary policy management, right from the beginning of 2025, the SBV had assigned a credit target of 16% for the credit institutions’ proactive implementation. By the end of Q1, the credit growth reached 3.93% on a YOY basis, a 2.5 times increased compared to Q1 of 2024 (1.42%). In the coming time, the SBV would continue to monitor the situation, and if the inflation is controlled at a low level, the SBV may adjust the credit growth to accelerate the economic development.
An overview of the meeting
In terms of the interest rates, after the increases of the mobilization interest rates by some commercial banks, the SBV had convened a meeting to request the banks to reduce their interest rates. The average mobilization interest rates had only recorded a 0.08% increase, while the lending interest rates had continued to decrease by an additional 0.4% against that of the end of 2024, demonstrating the banking system's great efforts to support the economy.
Regarding the exchange rate, SBV Governor Nguyen Thi Hong acknowledged that this is an issue of great concerns to all businesses after President Trump's announcement of the reciprocal tariffs. The SBV had followed closely the developments after President Trump's announcement. According to the SBV’s assessment, the solutions proposed at the Government’s meetings are very appropriate in with the situation.
The SBV will monitor closely the market developments to regulate the tools and solutions in an appropriate manner, with special consideration given to the harmony between the exchange rate and the interest rate reduction targets", SBV Governor Nguyen Thi Hong shared about the SBV’s operating orientations.
With regard to the restructuring of the credit institution system, Governor Hong shared that the SBV had recently organized a meeting to review the implementation results of Decision No. 689/QD-TTg. Accordingly, the SBV had completed the compulsory transfers of 4 banks in late 2024 and early 2025. So far, the implementation progress has been quite positive with significant senses of responsibility from the transferees. However, there is still one area requiring more support from the Government. That is, when approving the scheme on the compulsory transfers, the Government agreed on the support solutions in line with the former Law on Credit Institutions, and possible support solutions in line with the revised Law on Credit Institutions in 2024 would be considered and submitted later.
"SBV has requested and hoped that the relevant Ministries and agencies, especially the Ministry of Justice, will support us to find good solutions to accelerate the restructuring process." the Governor said.
HY