Vietnam: Selected Issues

International Monetary Fund

No 2024/307, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper overviews the different tools employed by the State Bank of Vietnam (SBV) and empirically analyzes the monetary policy transmission mechanism, comparing the effects from different SBV rate shocks. The results presented in this chapter indicate that the monetary policy’s interest rate channel affects main financial variables, but there are other factors in the transmission that curtail its effectiveness. In contrast, the transmission to inflation or industrial production is found to be generally weak, with only the combined repo/SBV bill rates generating a statistically significant effect. These findings stress the importance of modernizing SBV’s monetary policy framework to strengthen its transmission mechanism and better achieve its goals. Most central banks usually have one main policy rate employed to achieve one main objective and conduct open market operations to make the policy rate effective throughout the economy. Achieving this, along with a clear communication strategy that it is easy to understand would supply the SBV with a stronger monetary policy framework and greater ability to weather future eventual shocks.

Keywords: sovereign bond market; Vietnam's government bond bond market; government bond market; Policy trade-off; market size; Sovereign bonds; Currency markets; Central bank policy rate; Securities markets; Inflation; Global; Southeast Asia (search for similar items in EconPapers)
Pages: 42
Date: 2024-09-27
New Economics Papers: this item is included in nep-sea
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=555684 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfscr:2024/307

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Staff Country Reports from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().