Vietnam’s inflation and interest rate still at the "top", report
Vietnam’s inflation and interest rate still at the "top", report
Inflation and interest rates in Vietnam are still high in comparison with many countries, after a long period of macroeconomic instability, a report by the Central Economic Committee said.
According to the report, in the past 14 years, China’s average inflation was 2.32%/year. It was 2.60%/year in Thailand, compared to 7.9%/year in Vietnam.
Despite changes in 2008, both China and Thailand quickly adjusted their inflation to the average low level of around 2% in the past two years. Last year, Vietnam's CPI rose by 1.84%, equivalent to that of Thailand and China.
Therefore, the report said, in the coming years, curbing inflation will remain a top priority in the monetary policy of Vietnam.
On the other hand, interest rates in Vietnam in recent times have been at a high level. At the same time, in China and Thailand the average interest rate in the past 10 years was around 2-4%/year, compared to more than 10% in Vietnam.
Although the situation has improved since 2013, the lending rates in Vietnam in May 2015 were still at 8.5% - 9.5%/year, still very high compared to China and Thailand.
The report noted that the difference in interest rates will be obstacles to maintain a stable exchange rate under conditions of financial liberalization.
In the future, Vietnam’s monetary stability will require a synchronized approach through a policy of reducing credit interest rates, controlling inflation and stabilizing the exchange rate.
