Banks build broader support for business

Vietnam’s banking sector is reshaping lending and financial support strategies amid rising pressure from inflation, exchange rates, and slowing global demand.

- By Le Khanh

Concerns are growing over how monetary policy can continue supporting growth when policy space is becoming more constrained.

At a seminar on the role of the banking sector in supporting economic growth held in Hanoi in early May, Nguyen Phi Lan, director general of the Forecasting, Statistics and Monetary-Financial Stability Department at the State Bank of Vietnam (SBV), said inflationary pressure is becoming one of the most immediate concerns.

Inflation in April rose by more than 5 per cent on-year, while the International Monetary Fund forecasts Vietnam’s inflation this year could reach 4.9 per cent, exceeding the National Assembly’s 4.5 per cent target.

“External trade conditions are also becoming less favourable. Vietnam had already begun showing signs of returning to a trade deficit during the first four months of 2026 after several years of maintaining a trade surplus. If external conditions worsen further, pressure on the exchange rate could intensify in the months ahead,” Lan said.

The challenge for the SBV is that these risks are emerging while policymakers are still expected to support lower lending rates, maintain liquidity and stabilise the foreign exchange market.