Despite numerous challenges and difficulties at certain points, monetary policy in 2024 was oriented towards loosening, with positive credit growth and stable policy rates. Will this trend continue into 2025? Pressures in 2024 Rising gold prices, a strong U.S. dollar, the cryptocurrency frenzy led by Bitcoin, geopolitical tensions and military conflicts in the Middle East, as well as the impact of the U.S. presidential election, piled significant pressures on foreign exchange markets and monetary policy. Despite these pressures, the stable maintenance of policy rates throughout 2024 marks a success for Vietnam’s monetary policy. However, commercial banks showed a more immediate reaction, with deposit rates beginning to trend upward from the start of Q2 2024. By mid-December, the average deposit rate of 35 domestic banks for terms of 1–11 months had increased by 0.72 percentage point compared to the end of Q1. For 12-month terms, the rise was 0.6 percentage point, and for terms over 13 months, it rose by 0.31 percentage point. Nevertheless, current deposit rates are only equivalent to or slightly higher than levels at the end of 2023. In addition to the impact of the dollar spike and the stronger performance of other asset channels reducing the appeal […]
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