The State Bank prioritizes controlling inflation at about 4.5%

According to Directive No. 1 of the Governor, the State Bank will operate monetary policy proactively and flexibly, closely coordinating with fiscal policy and other macro policies. This agency also prioritizes the target of controlling inflation at an average of about 4.5% in 2026, contributing to maintaining macroeconomic stability and supporting sustainable economic growth.

The State Bank also expects system-wide credit growth to be about 15%, with adjustments (increased or decreased) in accordance with developments and the actual situation. In addition, managers will synchronously deploy solutions for foreign currency management and state foreign exchange reserves, contributing to market stability and supporting monetary policy management.

The directive also requires units in the industry to synchronously deploy solutions to control and handle bad debt, improve credit quality, and maintain the bad debt ratio at a safe level. In addition, credit institutions also need to strengthen risk management and limit bad debts, thereby contributing to ensuring safety and stability of operations.

According to data from the State Bank, by the end of 2025, outstanding loans across the economy reached 18.6 million billion VND, an increase of 19.1% compared to the end of the previous year. Mr. Pham Chi Quang, Director of Monetary Policy, said last year’s credit growth was the highest in the past 10 years, equal to 146% of GDP, ranking first among low-middle income countries.

This year, in addition to achieving the 15% growth target, the State Bank continues to implement the mechanism of allocating credit “room” (growth limit) to each bank based on the 2024 ranking results, multiplied by the common coefficient applied to units.

The credit limit mechanism has been maintained by management agencies for the past ten years. This is a tool for this agency to control loan quality as well as serve other macroeconomic goals such as interest rates, money supply and inflation.

However, this tool is currently considered to create a ask-give mechanism, in some cases making it impossible for borrowers to access credit if the bank no longer has a limit. In August 2025, the Prime Minister requested the State Bank to soon develop a roadmap and pilot the removal of credit growth targets.