Vietnam: Supportive stance as inflation risks recede – DBS

DBS Group Research economist Chua Han Teng expects the State Bank of Vietnam to keep its refinancing rate at 4.50% through end-2026. The report highlights a broadly stable Vietnamese Dong against the US Dollar, easing headline inflation, and strong GDP growth. DBS raises its 2026 growth forecast to 8.0% as supportive monetary policy is maintained.

SBV seen holding rates to 2026

"The State Bank of Vietnam (SBV) kept its refinancing rate unchanged at 4.50% in 1H26, and we expect this steady stance to extend until the end of 2026."

"Although the Vietnamese dong has been hovering on the weaker end of its trading band against the US dollar in 2Q26, it has remained broadly stable with a slight appreciation bias, despite bouts of regional FX volatility driven by Middle East tensions and hawkish re-pricing of US interest rate expectations."

"At the same time, headline inflation eased and moved closer to its 2026 target of 4.5% at 4.7% yoy in June 2026 from above 5% yoy in April and May."

"We expect these growth drivers to sustain over the coming months, and therefore raise our 2026 GDP growth forecast to 8.0% from 6.5%."

"TheSBV can afford to keep monetary policy supportive to sustain growth, as upside inflation risks recede, although with vigilance over the currency."