The Impact of Monetary Policy on the Stock Market: Evidence from Vietnam

Tuyen Trung Dang, Hong Thi Nguyen () and Hai Trung Dao
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Tuyen Trung Dang: VNU University of Economics and Business
Hong Thi Nguyen: East Asia University of Technology
Hai Trung Dao: VNU University of Economics and Business

A chapter in Proceedings of the 5th International Conference on Research in Management and Technovation, 2025, pp 399-411 from Springer

Abstract: Abstract Using the data from Vietnam’s stock market from 2001 to 2023, the paper analyzed the effect of monetary policy on the stock market by applying the ARDL method. The findings revealed that, in the short term, the VNINDEX at its first lag and the rediscount interest rate are the two primary factors influencing the stock market’s growth. In the long run, all three variables including refinancing interest rate, rediscount interest rate, and CPI) have a significant effect on the VNINDEX, with respective coefficients of − 563.55, 235.69, and 4527.863. Based on the research findings and an analysis of Vietnam’s monetary policy management and stock market growth, the study provided some policy suggestions. The first is to transition from controlling the money supply to managing interest rates, and the second is to implement monetary policies that promote economic growth. For investors, the research offers detailed insights into how monetary policy actions, like interest rate adjustments, can influence the stock market. This information enables investors to better grasp the factors that drive market prices and trends, helping them make wiser investment choices, adjust strategies, and optimize asset allocation for improved returns.

Keywords: Monetary policy; Rediscount interest rate; Refinancing interest rate; Stock market; Vietnam (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/978-981-97-9992-3_27

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