State Bank of Vietnam to keep policy rates steady in 2024: UOB
With the pace of economic activities on the mend and inflation rates already easing below the target level, the State Bank of Vietnam (SBV) will maintain its refinancing rate at the current level of 4.5% to support economic recovery, the United Overseas Bank (UOB) said in a report.
The State Bank of Vietnam (SBV) will maintain its refinancing rate at the current level of 4.5% to support economic recovery. (Photo: VNA)
HCM City (VNA) – With the pace of economic activities on the mend and inflation rates alreadyeasing below the target level, the State Bank of Vietnam (SBV) will maintainits refinancing rate at the current level of 4.5% to support economic recovery, theUnited Overseas Bank (UOB) said in a report.
According to the UOB’s Global Economics & Markets Research, Vietnam’s GDP growth accelerated further to 5.33% year-on-year in the third quarter of 2023,from 4.14% year-on-year in the second quarter. This was underpinned byimprovements in the trade performance, manufacturing sector output and domesticactivities after struggling in the first half of 2023.
Data releases for the October-November period reaffirm that activities have stabilised and, in some cases, improved markedly compared to the first half of the year.Manufacturing output has been unceasingly accelerating since its negativereading in May, suggesting that the sector’s momentum is likely to continue into2024.
Experts from the UOB expects the momentum from the third quarter to carry overto the final quarter of the year, especially with more supportive domesticpolicies. They maintain the country’s full-year growth forecast at 5%, with theassumption of further acceleration of real GDP growth in the fourth quarter to7% year-on-year.
TheUOB’s updated USD/VND forecasts are at 24,000 in the first quarter of 2024, 23,800in the second, 23,600 in the third, and 23,500 in the fourth.
In its latest report, HSBC’s global research team also expected the SBV to holdits policy rate steady at 4.5% in the whole of 2024 to support economicgrowth and recovery.
Inflation rate under control and economic prospects, especially on the externalfront, are robust signs; however, the risk of increasing prices is on thehorizon.
The HSBC experts also warned about trade prospects as demand in large trademarkets is still weak despite recent data showing Vietnam’s stable exportgrowth. The country’s Manufacturing Purchasing Managers’ Index (PMI) dropped to47.3 in November, with production volumes and the number of ordersdecreasing./.
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The State Bank of Vietnam (SBV) will maintain its refinancing rate at the current level of 4.5% to support economic recovery. (Photo: VNA) 
