MONETARY MARKET UPDATE APRIL 2025: IMPACT OF THE TARIFF SHOCK ON CREDIT GROWTH AND EXCHANGE RATES
The SBV continued net injection via the OMO channel in April 2025, with a net injection of VND 16.8 trillion (as of April 24, 2025). Demand for longer-term loans in the open market was more evident during the month.The interbank market remained relatively stable and did not react significantly to the tariff shock announced by the Trump administration on April 2.
The previous downtrend in deposit rates has paused. As of April 23, 2025, the average 12-month deposit rate had decreased by about 0.12 percentage points compared to the end of 2024. In contrast, lending rates fell more sharply, by approximately 0.6 percentage points in the first three months of 2025, according to SBV estimates.
Credit grew positively in Q1/2025. However, the tariff shock may negatively affect credit in the manufacturing and consumption sectors in the coming months.
In a worst-case scenario where Vietnam's exports face a 46% tariff entering the U.S. market, causing declines in exports and GDP growth, we expect the SBV to implement support measures such as debt deferrals/rescheduling to minimize bad debt risks—similar to the COVID-19 period or the Yagi typhoon disaster. Achieving the 16% credit growth target in 2025 would be difficult under this scenario.
The USD has weakened sharply since Trump announced retaliatory tariffs, which is favorable for the USD/VND exchange rate. However, uncertainty around Vietnam’s final tariff treatment after negotiations creates concerns about exports and foreign investment flows, triggering pressure on the USDVND stability.
In the short term, SBV has room to manage VND depreciation within a 3–5% band. In the negative scenario, a 46% tariff on exports could cause stronger VND depreciation to offset export market tariff pressure.
Viet Dragon Securities belongs to top 20 biggest securities companies in terms of chartered capital in Vietnam. With a qualified, dedicated and professional team, a widespread network, advanced technology, diversified products and services, and good relationship with local and foreign institutions, we provide a wide range of services and products to our clients both individuals and institutions, both local and foreign. We commit to provide our clients with promising investment opportunities and a comprehensive and professional financial investment services.
RongViet Research reports are diversified and abundant, along with in-depth analysis and performed by experienced, highly-qualified and knowledgeable teams. With the objectives of transparency, accurate and timely manner, RongViet believes that our products would always be important sources of information for customers/investors’ investment decisions.”
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.