According to the Governor's Directive number 1, the State Bank of Vietnam (SBV) will operate a proactive, flexible monetary policy, closely coordinating with fiscal policy and other macroeconomic policies. The SBV also prioritizes controlling average inflation at about 4.5% in 2026, contributing to macroeconomic stability and sustainable economic growth.

The SBV also projects system-wide credit growth of about 15%, with adjustments (up or down) as actual developments dictate. Additionally, regulators will simultaneously implement solutions for foreign currency management and state foreign exchange reserves, contributing to market stability and supporting monetary policy operations.

The directive also requires entities within the sector to simultaneously implement solutions to control and resolve bad debts, improve credit quality, and maintain bad debt ratios at a safe level. Credit institutions must also strengthen risk management and limit the incurrence of bad debts, ensuring operational safety and stability.

A bank's transaction office. Photo: Giang Huy

According to SBV data, by the end of 2025, outstanding loans to the entire economy reached 18,6 quadrillion VND, a 19,1% increase compared to the end of the previous year. Pham Chi Quang, Director of the Monetary Policy Department, stated that last year's credit growth was the highest in about 10 years, equaling 146% of GDP and leading among lower-middle-income countries.

This year, in addition to achieving the 15% growth target, the SBV continues to implement a mechanism for allocating credit "room" (growth limits) to each bank based on their 2024 rating scores, multiplied by a common coefficient applied to all entities.

The regulatory authority has maintained this credit limit mechanism for over a decade. It serves as a tool to control lending quality and achieve other macroeconomic objectives, including interest rates, money supply, and inflation.

However, critics currently argue this tool creates an "ask-give" mechanism, which in some cases prevents borrowers from accessing credit if banks have no remaining limits. In 8/2025, the Prime Minister requested the SBV to promptly develop a roadmap and pilot the abolition of credit growth targets.

Trong Hieu