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Friday, June 21, 2024

Anticipating monetary policy in 2024

By Dung Nguyen

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As we have entered into the new year 2024, whether or not interest rates will be further cut is hard to tell. Monetary policy this year will revolve around the delicate task of striking a balance. Economic growth will be still needed but destabilizing factors like inflation, exchange rate volatility and bad debt should be handled with care. Navigating challenges In contrast to the market’s previous focus on easing monetary policy through interest rate cuts in 2022-2023, Vietnam is treading cautiously as it contemplates the possibility of further rate reductions in the current year. Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu recently emphasized that any further rate cuts would be executed in a way that maintains macroeconomic stability. Financial experts have presented a nuanced outlook for Vietnam’s monetary policy in 2024, suggesting that the era of substantial rate cuts may be waning. While the central bank did reduce key rates by 150 basis points in 2023, the prospect of additional decreases appears unlikely, primarily due to the ongoing economic recovery, according to Brian Lee Shun Rong, an economist at Maybank Investment Bank. “The central bank may hold rates steady through 2024 and 2025, given the […]
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