Analysis of Factors Impacting on Money Demand in Vietnam

The article analyzes and develops the demand function model in Vietnam based on the application of the VECM error correction model. Variables used are industrial production value (OI), Inflation Expectancy Index (INF), treasury bill (BR) and VND/USD exchange rate (EX). The model tests in the study show that the relationship between the variables in M1, M2 money demand functions in the study time is consistent with the theory of money demand, which is likely to explain the practice in Vietnam. In particular, the results of the study allow analysis and forecast of monetary policy in monetary policy operation of the State Bank of Vietnam.