Hanoi (VNA) ꦰ- 2024 is a challenging year globally, with the world economy facing unpredictable shifts, but Vietnam's banking system has successfully navigated these challenges, achieving significant milestones, said State Bank of Vietnam (SBV) Governor Nguyen Thi Hong.

At an SBV conference to review the banking sector’s 2024 performance and outline its objectives for 2025 in Hanoi on December 14, Hong reported that inflation was kept in check at 3.69% over the first 11 months of the year. Also, lending rates decreased, and exchange rates remained stable amid intense international volatility. These outcomes were particularly impressive given the turbulent global economic landscape, she said, adding international organizations have commended Vietnam’s capacity to manage monetary policy effectively in this environment. She reflected on the global economic situation in 2024, which was marked by slow recovery and complex shifts. With Vietnam’s high degree of economic openness, the country was notably impacted by global fluctuations. The governor pointed out that these external developments directly influenced Vietnam’s economic environment. Domestically, the Vietnamese economy showed signs of recovery with growth improvement in 2024. However, internal weaknesses, including challenges in the real estate and corporate bond markets and public concerns over high gold prices, placed additional pressure on banking activities. These factors required the central bank to carefully balance its priorities—controlling inflation, supporting growth, ensuring banking safety, and maintaining exchange rate stability.

Important hallmarks

Despite the global and domestic economic turbulence, 2024 was a successful year for Vietnam’s banking system. The government’s decisive leadership and the SBV’s proactive measures played a crucial role in ensuring the stability of the financial sector. Among the major achievements, the country managed to keep inflation under control, stabilize the exchange rate, and lower lending rates—critical factors that supported economic recovery and stability. The central bank also made significant strides in restructuring the banking system. In 2024, two of the four "zero dong" banks were successfully transferred, with plans for the remaining two banks to follow suit. This marks an unprecedented phase in Vietnam's banking history, requiring strong cooperation between various agencies. Hong emphasized that this process marked an important turning point in the country’s efforts to strengthen its financial system and enhance transparency.

According to the governor, one of the key achievements in 2024 was the credit growth rate. By December 13, total credit in the economy had increased by approximately 12.5% compared to the end of 2023. The credit focus remained on supporting production, business, and priority sectors. Following Government direction, the SBV adjusted its credit growth targets twice during the year to ensure that financing was available to meet the economy’s needs while keeping inflation under control. In addition, it placed a strong emphasis on maintaining financial stability. It instructed credit institutions to implement policies that ensured safe and effective credit growth while minimizing bad debts. Banks were directed to focus credit on production and key economic growth sectors, with strict oversight on high-risk areas. The SBV also worked to keep deposit interest rates stable while striving to reduce lending rates through cost-cutting measures, administrative simplification, and technological advancements.

Orientations for 2025

As Vietnam approaches 2025, the final year of the 2021-2025 socio-economic development plan, Governor Hong outlined the priorities for the year ahead. The central bank’s focus will be on achieving the remaining objectives of the current development plan while preparing for the new government’s term. Specific priorities will include closely monitoring market conditions to manage exchange rates flexibly, supporting credit growth in priority sectors, and enhancing banking system restructuring. She also highlighted the importance of continuing efforts to improve the credit institution system’s health, transparency, and compliance with international standards. The SBV will focus on resolving bad debts and improving credit quality, ensuring the system’s long-term stability./.