This paper provides an overview of inflation developments in Vietnam in the years following
the doi moi reforms, and uses empirical analysis to answer two key questions: (i) what are the
key drivers of inflation in Vietnam, and what role does monetary policy play? and (ii) why
has inflation in Vietnam been persistently higher than in most other emerging market
economies in the region? It focuses on understanding the monetary policy transmission
mechanism in Vietnam, and in understanding the extent to which monetary policy can
explain why inflation in Vietnam has been higher than in other Asian emerging markets over
the past decade.