January 2026 Macro and Fixed Income Update | Manufacturing Resilience Amid Systemic Liquidity Volatility

The report provides the latest updates on Vietnam’s macroeconomic conditions and fixed income market developments for January 2026.

Below are the key highlights:

Manufacturing Expansion and Resilient Domestic Demand

o       CPI: January 2026 CPI arrived at 2.53% YoY (+0.05% MoM) driven by sharp decline in transport cost. Industrial activity maintains expansionary momentum with PMI at 52.5, and IIP growth surged to 21.5% YoY.

o       Trade: In January 2026, total trade turnover reached US$88.2bn (-0.6% MoM, +39.0% YoY). Exports amounted to US$43.2bn (-2.0% MoM, +29.7% YoY), while imports rose to US$45.0bn (+0.6% MoM, +49.2% YoY). With import growth outpacing exports, Vietnam recorded a trade deficit of US$1.78bn, marking the second consecutive month of deficit.

o       Strong year-end retail & consumer activity, with December retail sales reaching VND 627.8tn (+4.4% MoM, +10.0% YoY). The recovery was bolstered by goods, accommodation & food service, tourism (over 2 million international visitors (+15.7% YoY).

o       Bank Consumer activities: remain resilient, with January retail sales reaching VND 632.4tn (+2.6% MoM, +9.3% YoY), underpinned by robust demand in household goods, apparel, and F&B amid TET holiday and significant recovery in tourism with 2.45 million international arrivals (+18.5% YoY).

o       Credit growth: SBV set a 15% credit growth target for 2026, of which real estate lending expansion remains below each institution's average credit growth rate. In addition, to manage liquidity, Q1 2026 credit expansion is capped at 25% of the annual credit growth target of each bank.

Fixed Income Market Highlights: Tight Liquidity Without Clear Easing Signals.

o       Liquidity: eased in early January 2026 but tightened sharply toward month-end. Outstanding OMO balances declined to VND 326tn amid heavy maturities before rebounding to VND 378tn. The overnight (ON) rate stayed below 6% for most of the month but surged to 16.38% on February 3, 2026, prompting the SBV to conduct a net liquidity injection of VND 60tn. Meanwhile, 1W and 1M rates rose at month-end, while the 3M rate remained broadly stable at 6.5–7.5%.

o       G-Bond: January G-bond issuance issuance reached VND 26tn (+63% YoY), fulfilling 5.2% of the VND 500tn annual target. The yield curve shifted upward, led by a 35 bps increase in the 5-year tenor. Secondary market liquidity improved to VND 340.5tn (+34.2% MoM), despite net foreign selling of VND 1.96tn.

o       USD/VND exchange rate: remained stable in January but increased towards month-end. The interbank rate dropped to 25,940 (-VND 360 MoM), while the grey-market rate fell sharply to 26,200 before it increased back to 26,450 (-1.4% MoM).

o       Corporate bond: corporate bond issuance was quite in January, only reached VND 3.7tn, primarily concentrated in banking (~60%), finance (~8%), and real estate (~5%) sectors.