Article: Monetary policy's impact on Vietnamese stock market bubbles Journal: International Journal of Business and Emerging Markets (IJBEM) 2026 Vol.18 No.7 pp.1 - 22 Abstract: This study investigates the relationship between monetary policy and stock market bubbles in Vietnam over the period 2010-2022. Using the supremum augmented Dickey-Fuller (SADF) and generalised supremum augmented Dickey-Fuller (GSADF) tests, the paper first confirms the presence of stock market bubbles in both the Ho Chi Minh City (VNI) and Hanoi (HNX) indices during several subperiods, notably 2017-2018 and 2020-2022. Subsequently, a vector autoregression (VAR) model is employed to examine the influence of key monetary policy instruments - overnight interbank interest rate, refinancing rate, money supply, inflation, and industrial production index - on bubble dynamics, represented by the P/E ratio. The results show that higher interbank and refinancing rates are associated with shrinking bubbles, while money supply, inflation, and industrial production exert relatively weak or insignificant impacts. The findings highlight the critical role of interest rate management in mitigating stock market bubbles and offer policy implications for regulators and investors in emerging markets like Vietnam. Inderscience Publishers - linking academia, business and industry through research

Title: Monetary policy's impact on Vietnamese stock market bubbles

Authors: Ngoc Anh Pham; Phuong Lan Le; Bin Sy Nguyen

Addresses: Foreign Trade University, 91 Chua Lang, Dong Da, Hanoi, Vietnam ' Foreign Trade University, 91 Chua Lang, Dong Da, Hanoi, Vietnam ' Hoang Thanh Thang Long Co., Ltd., No. 8B, Alley 5, Ao Sen Street, Ha Dong Ward, Hanoi, Vietnam

Abstract: This study investigates the relationship between monetary policy and stock market bubbles in Vietnam over the period 2010-2022. Using the supremum augmented Dickey-Fuller (SADF) and generalised supremum augmented Dickey-Fuller (GSADF) tests, the paper first confirms the presence of stock market bubbles in both the Ho Chi Minh City (VNI) and Hanoi (HNX) indices during several subperiods, notably 2017-2018 and 2020-2022. Subsequently, a vector autoregression (VAR) model is employed to examine the influence of key monetary policy instruments - overnight interbank interest rate, refinancing rate, money supply, inflation, and industrial production index - on bubble dynamics, represented by the P/E ratio. The results show that higher interbank and refinancing rates are associated with shrinking bubbles, while money supply, inflation, and industrial production exert relatively weak or insignificant impacts. The findings highlight the critical role of interest rate management in mitigating stock market bubbles and offer policy implications for regulators and investors in emerging markets like Vietnam.

Keywords: monetary policy; stock market bubbles; vector autoregression; Vietnam.

DOI: 10.1504/IJBEM.2026.153689

International Journal of Business and Emerging Markets, 2026 Vol.18 No.7, pp.1 - 22

Received: 05 Dec 2024
Accepted: 19 Sep 2025
Published online: 21 May 2026 *

Title: Monetary policy's impact on Vietnamese stock market bubbles

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