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This study examined the effect of monetary policy on bank credit in Vietnam. Time series data are obtained at quarterly frequency for the period 2000-2021. The factors of interest rate, exchange rate, expanded money supply growth, and economic growth are used as a proxy for monetary policy affecting bank credit in the VECM regression model. The study concludes that monetary policy variables have a significant influence on bank credit in Vietnam and this influence shows no sign of fading away. The pass-through of monetary policy factors affecting the credit supply expansion policy of banks to the economy is recognized in both the short and long term. Interest rates on bank loans have an impact of over 4% on bank credit. The expansion rate of money supply growth has a positive and significant impact on bank credit to the extent of more than 20%. Exchange rates have an impact of more than 9% on bank credit. Economic growth affects more than 8% of bank credit. Monetary policy of the Central Bank affects the supply of credit to the economy of banks. The Central Bank of Vietnam is recommended that the variables of monetary policy be managed properly and that the goals be set towards increasing bank credit for the economy.

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Article Details

Issue: Vol 7 No 1 (2023): Vol 7 (1): Under publishing
Page No.: In press
Published: Mar 5, 2023
Section: Research article

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Copyright: The Authors. This is an open access article distributed under the terms of the Creative Commons Attribution License CC-BY 4.0., which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

 How to Cite
Lê, H. (2023). Effects of money policy on bank credit: Experimental evidence in Vietnam. VNUHCM Journal of Economics, Business and Law, 7(1), In press.

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