The VN-Index is striving to reclaim the 1,700-point level after slipping below 1,600 and touching 1,580 in mid-October.

Macroeconomic pressure Despite expectations of solid economic growth in 2025 and optimistic forecasts for 2026, Vietnam’s stock market—often seen as a barometer of the economy—continues to struggle in its attempt to return to the peak reached in mid-October. Although the index has shown improvement over the past two weeks, market liquidity remains subdued, reflecting lingering uncertainty about investor confidence in future prospects. The first challenge for this investment channel is the renewed upward trend in interest rates toward year-end. Over the past month, a number of banks—now including major lenders—have steadily raised deposit rates. The clearest evidence is that savings with terms of less than six months have been pushed to the ceiling rate of 4.75% per annum for private customers depositing online. As a result, a portion of funds is being redirected from the stock market into bank savings, contributing to weakened cash inflows over the past month. Many investors remain on the sidelines, wary that the market’s recovery momentum over the last two weeks may not be sustainable. The tightening liquidity in the banking system has added upward pressure on interest rates. In the third week of November, the State Bank of Vietnam (SBV) withdrew a net VND28.5 trillion. With banks racing to boost year-end credit in preparation for 2026 growth targets, deposit rates are expected to rise further through the remainder of the year. Inflationary pressures are expected to intensify as rising prices—particularly for food—pose a risk following recent storms and floods in central Vietnam. The damage has not only disrupted supply chains but also dealt a heavy blow to the operations of many businesses and industries, possibly weighing on economic growth in the fourth quarter. While lending rates may not immediately track the sharp increases in deposit rates, as banks remain under regulatory guidance to restrain them, they are projected to climb again in early 2026. Against this backdrop, the growth outlook for the business community is set to deteriorate. Beyond inflation and interest rates, the stock market has recently come under pressure from exchange rate fluctuations between the U.S. dollar and the dong. On November 24, the greenback surged in the free market to VND27,900 per dollar—matching the selling rate set on November 14 and marking the highest level since the start of 2025. Meanwhile, the bank-quoted rate is nearing the SBV’s ceiling of VND26,400. As a result, the gap between the free-market rate and the official rate has widened to nearly VND1,500, underscoring strong demand for foreign currencies to meet import needs during the year-end production and business peak. Waiting for a new wave Analysts anticipate that the exchange rate will ease in the near term amid a potential depreciation of the U.S. dollar. In a recent report, UOB adopted a cautious stance, revising its projections to VND26,400 for Q4-2025, VND26,300 for Q1-2026, VND26,200 for Q2-2026, and VND26,100 for Q3-2026. Notably, the Federal Open Market Committee is expected to lower the benchmark U.S. dollar interest rate once again at its final meeting of the year on December 11—marking the third cut in 2025 after reductions in September and October. According to the CME FedWatch Tool, the probability of a 25-basis-point cut, bringing rates down to the 3.5–3.75% range, surged to over 75% on November 24, compared with just 36% a week earlier. Interest rate pressures are expected to ease gradually from early 2026, once banks have met their 2025 credit growth targets and deposit inflows improve due to seasonal factors around the Lunar New Year. In addition, the central bank may expand money supply in the final months of the year to bolster system liquidity, aiming to keep interest rates under control. As of September 25, the total means of payment had increased by 10.61% compared with the end of 2024—more than double the 4.55% growth recorded in the same period last year and exceeding the 9.74% rise in capital mobilization, according to the National Statistics Office. Typically, money supply accelerates sharply toward year-end. For instance, in 2024 it jumped 6% in the fourth quarter alone, with December contributing 3.83% of that growth. More importantly, the market is awaiting a new economic stimulus package to support growth in 2026, particularly to address the damage caused by recent storms and floods. In early November, the SBV issued Document 9651/NHNN-TD, directing credit institutions to cut lending rates by 0.5–2% per annum for three to six months for customers affected by the disasters. Banks have also been instructed to restructure debt repayment schedules, grant interest and fee exemptions or reductions, and roll out preferential credit packages to aid the recovery of production and business activities. The Chinese government has recently weighed a package of bold measures to support the real estate market, including mortgage subsidies for first-time buyers, tax incentives, and lower transaction costs. Earlier, in September, China introduced interest rate subsidies for consumer loans to stimulate household spending. Under this program, borrowers can receive a one-percentage-point annual interest subsidy, with the level of support tied to loan size. Yet, investors remain cautious, as the risk of a black swan event stemming from rising tensions between China and Japan cannot be overlooked.