DBS Group Research economist Chua Han Teng anticipates that the State Bank of Vietnam (SBV) will adopt a more hawkish monetary policy stance as Vietnam's inflation continues to accelerate and remains above the central bank's target [1]. DBS has revised its 2026 average headline inflation forecast for Vietnam upward to 4.8%, compared to the previous estimate of 3.8%, citing persistent price pressures driven by high energy costs, broadening cost pass-through, and weakness in the Vietnamese dong [1]. The report notes that average inflation in the first four months of the year was 4.0% [1].
In response to these inflationary dynamics and ongoing uncertainties such as the unresolved Iran war and the reopening of the Strait of Hormuz, DBS now expects the SBV to raise its refinancing rate by 50 basis points to 5.00% in 2026, potentially as early as the second quarter of that year [1]. The research highlights that Vietnam is already considered among the more hawkish central banks in the region, and policymakers are likely to prioritize inflation-fighting credibility to anchor inflation expectations [1].
DBS warns that near-term price pressures are likely to remain elevated, which could reinforce the SBV's inclination toward tighter monetary policy [1]. The report underscores the importance of the central bank's actions in curbing price pressures and maintaining economic stability [1].
CONCLUSION
DBS forecasts that the State Bank of Vietnam will likely hike its refinancing rate by 50 basis points to 5.00% in 2026 due to persistent inflationary pressures. Policymakers are expected to prioritize inflation control, signaling a more hawkish stance in the near term.