Vietnam: Inflation surge and SBV policy stance – UOB

UOB Global Economics & Markets Research highlights that Vietnam’s headline CPI jumped to 4.65% year-on-year in March 2026, driven by higher energy costs, pushing inflation above the State Bank of Vietnam’s 4.5% target. As the shock is seen as supply-driven, UOB expects no policy tightening and projects the SBV refinance rate will stay at 4.50% through 2026.

Supply-driven inflation keeps SBV on hold

"The most notable difference this quarter is that headline consumer price index jumped to 4.65% y/y in Mar 2026, from an average of 2.94% in Jan-Feb."

"The latest inflation rate is now above SBV’s target of 4.5%."

"With inflation rate expected to rise further in the months ahead and much more above the 4.5% target, the focus will be on the State Bank of Vietnam (SBV)’s policy stance."

"Given that the price increases are driven by supply rather than demand, policy tightening is not the right response."

"Based on the above factors, we expect SBV to stay on hold with its refinance rate at 4.5% through 2026."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)