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MONETARY MARKET IN MAR 2025: CAUTIOUS MONETARY POLICY EASING

From the beginning of March 2025, the SBV ceased the issuance of SBV bills while maintaining liquidity support through collateralized lending via open market operations (OMO). Notably, the extension of OMO loan terms while keeping interest rates unchanged reflects the readiness to provide liquidity to the system when needed.
On the interbank market, VND lending rates showed a downward trend toward the end of the month. Meanwhile, deposit interest rates declined broadly since late February 2025, with a common decrease of 10-20 basis points.
The DXY index dropped significantly in March 2025. Meanwhile, the USD/VND exchange rate continued to rise; however, the depreciation pressure on the dong remained at an acceptable level (0.5-1.0% compared to early 2025).
The risk of Vietnam facing reciprocal tariffs due to its large trade deficit with the U.S. remains and could increase exchange rate pressure in the short term. The reciprocal tariffs under the Trump 2.0 administration, set to be announced on April 2, are expected to be narrower in scope than initially planned. However, the exact targets and extent of the tariffs remain unclear, and they may be implemented immediately.
As of March 12, credit growth reached 1.24%, higher than the 0.7% increase in the first two months of 2024. Accordingly, Q1 2025 credit growth is expected to align with the full-year target of 16%.
Over the past month, the restructuring of weak banks continued to accelerate with Decree 69. Specifically, from May 19, 2025, banks undergoing mandatory transfers—including MBB, VPB, and HDB (excluding VCB)—will see their foreign ownership limit raised to 49%, up from the current 30%.