Vietnam central bank puts 4.5% inflation target first
The target is intended to safeguard macroeconomic stability and underpin sustainable growth.
THE HANOI TIMES — The State Bank of Vietnam (SBV) has set a priority target of keeping average inflation in 2026 at around 4.5% to help maintain macroeconomic stability and support sustainable economic growth.
Shoppers buy groceries at a supermarket in Hanoi. Photo: Cong Hung/The Hanoi Times
The target is stated in Directive No. 1 issued by SBV Governor Nguyen Thi Hong, which stresses the need to conduct monetary policy proactively and flexibly while ensuring close coordination with fiscal policy and other macroeconomic policies.
The central bank reaffirmed that controlling inflation at an average of about 4.5% in 2026 remains a key objective to safeguard macroeconomic stability and underpin sustainable growth.
It also plans to keep credit growth across the entire system at around 15%, with room for adjustment depending on actual developments.
In addition, the regulator will implement a comprehensive set of measures to manage foreign exchange and state foreign reserves, contributing to market stability and supporting monetary policy operations.
The directive requires units across the banking sector to step up measures to control and resolve bad debts, improve credit quality and maintain non-performing loan ratios at safe levels.
Credit institutions are also asked to strengthen risk management and limit new bad debts to ensure the safety and stability of the system.
According to the SBV, outstanding loans to the economy reached VND18,600 trillion (US$747 billion) by the end of 2025, up 19.1% from the previous year.
Pham Chi Quang, Director of the SBV's Monetary Policy Department, said credit growth last year was the highest in about a decade, equivalent to 146% of GDP and the highest among lower-middle-income countries.
This year, in addition to targeting 15% credit growth, the SBV will continue to apply the credit quota mechanism for each bank based on 2024 performance ratings multiplied by a common adjustment factor.
The credit quota system has been maintained for more than a decade as a tool to control loan quality and serve other macroeconomic objectives such as interest rates, money supply and inflation.
However, the mechanism has been criticized for creating a “ask-and-grant” process that, in some cases, prevents borrowers from accessing credit when banks run out of quotas.
In August 2025, the Prime Minister asked the State Bank to build a roadmap and pilot the removal of credit growth quotas.
