$1.18 billion in net liquidity was injected in the last week of May after unusual market moves on June 1 pushed Vietnam’s overnight interbank rate above 10%.
Interbank funding costs had already climbed from 5-6% for most of May to about 7% at month-end, even as the USD/VND interbank rate stayed tightly in a VND26,309-26,368 band.
Analysts said the squeeze reflects distorted liquidity transmission rather than a simple cash shortage: State Treasury deposits at four state banks were still about $28.9 billion on May 22, while public investment disbursement reached only 18% of plan.
That has left policymakers juggling growth, inflation and currency stability as Vietnam runs a nearly $14 billion trade deficit and faces a higher-for-longer global rate backdrop.
Can Vietnam maintain currency stability without sacrificing its ambitious growth targets amid rising US trade pressures?
As foreign capital flows in from its FTSE upgrade, can Vietnam overcome internal gridlock to fund its future growth?
Vietnam’s Liquidity Crunch 2026: Interbank Rate Surge, Deposit Flight, and the SBV’s Balancing Act
Overview
In early June 2026, Vietnam’s financial system faced a sharp spike in interbank rates, highlighting the State Bank of Vietnam’s (SBV) challenge of balancing economic growth with financial stability. The SBV needs to keep interest rates low to support businesses and investment, but must also avoid cutting rates too much, as this could reduce the yield gap between the Vietnamese Dong and the US Dollar, putting pressure on the foreign exchange market. This delicate situation requires the SBV to carefully weigh its monetary policy decisions to maintain both growth and currency stability.