Limited evidence Vietnam will enter a high interest-rate cycle as oil shocks and funding costs rise

Since the conflict erupted on February 28, 2026, Brent crude oil prices have risen from around $72 per barrel to above $110 per barrel, an increase of more than 50%. In a Reuters survey published on March 31, 2026, analysts revised up their 2026 average oil-price forecasts, with Brent at about $82.85 per barrel and WTI at about $76.78 per barrel. The U.S. Energy Information Administration (EIA) expects Brent to remain above $95 per barrel over the next one to two months, before falling below $80 per barrel in Q3 and fluctuating around $70 by year-end.

Oil-price path and forecast revisions

Overall forecasts point to oil prices staying elevated in the near term due to geopolitical factors, with a likely easing in the medium term if there are no widespread supply disruptions. In Mirae Asset’s latest oil-price outlook, the base-case scenario is for prices to retreat in steps rather than returning immediately to pre-conflict levels.

• Brent: about $80–$100 in the near term and around $80 by year-end
• WTI: about $80–$100 in the near term and $70–$80 by year-end

Vietnam’s macro backdrop: credit, deposits, and policy constraints

Domestic indicators as of the end of Q3 2025 show banking system credit growth at 14.5% and deposits up 11.4%. The widening gap between credit growth and deposits has pushed up the system’s cost of funds, suggesting a lending-rate floor in Vietnam that has become harder to ease even before oil-price spikes. The IMF also highlighted limited room for monetary loosening, with Vietnam’s 2026 GDP projected at 5.6% and inflation around 3.2%.

Trade balance and exchange-rate pressure

Mirae Asset said the oil-price shock could shift the risk structure of monetary policy in a less favorable direction. Higher oil prices raise inflation and increase import-inflation risks through energy costs. In the first two months of the year, Vietnam recorded a trade deficit of $2.98 billion, compared with a $1.77 billion surplus in the same period a year earlier, signaling a weakening trade balance and increasing exchange-rate pressure—further narrowing the State Bank of Vietnam’s (SBV) easing space.

Deposit and lending rates: current levels

SBV data as of March 31, 2026 show the following average VND deposit rates:

• Non-term deposits: 0.1%–0.2%
• Under-6-month tenors: 4.0%–4.5%
• 6–12 months: 5.0%–6.5%
• Over 12 months: 5.2%–6.6%

The average VND lending rate is around 7.1%–9.4%, with priority groups near 3.8%.

Is a high-rate cycle forming?

While deposit-rate levels are rising, Mirae Asset noted there is not yet enough basis to conclude that the banking system is entering a sustained high-rate cycle. Some banks advertise deposits at 9%–10%, reflecting local funding demand or special conditions, while broader large-bank 12-month tenor rates remain around 5%–7%. The uptrend is more likely to persist if the conflict scenario does not cool.

Short-term funding stress

Short-term funding pressure is evident in the overnight rate, which has spiked to as high as 17% and remained around 9%–10% toward the end of March 2026. Mirae Asset linked this to the gap between credit growth and deposits, as well as liquidity pressures tied to geopolitical tensions and global economic volatility.

Policy outlook: liquidity support over rate hikes

Against this backdrop, the State Bank of Vietnam is likely to prioritize liquidity injections through open-market operations or short-term repos rather than raising the policy rate. The aim is to balance growth support, exchange-rate stability, and inflation control.

In the near term, Mirae Asset expects Vietnam’s interest-rate trend to be flat or modestly higher, with upside risks driven by domestic funding pressures that have persisted since late 2025 and have been amplified by energy-price shocks, imported-inflation risks, and exchange-rate pressures.

Sector implications

Mirae Asset said a high-rate, tight-liquidity environment is likely to pressure capital-intensive and highly leveraged sectors dependent on cyclical demand, including real estate, equities, construction, and aviation. By contrast, oil & gas, fertilizers, and some banks with strong deposit bases and ample liquidity are better positioned to withstand pressures and may benefit if energy prices remain high.

Base-case scenario and policy priorities

Under the base-case scenario, geopolitical tensions are expected to ease gradually in steps, while oil prices are likely to stay elevated in the near term amid ongoing concerns and a cautious stance from the Fed. For Vietnam, Mirae Asset said policy priorities should focus on stabilizing the exchange rate, supporting system liquidity, and limiting interest-rate volatility rather than moving quickly to a tightening cycle.