In this article, the research team uses the VAR self-regression vector model to evaluate the impact of exchange rates on inflation and economic growth in Vietnam over the period 2005-2018. With six endogenous variables included in the VAR model: bilateral real exchange rate (Er), money supply (M2), exports (X), imports (IM), GDP at 2010 comparative prices (GDPR), the consumer price index (CPI) and the two exogenous variables, international price (Pw) and US Federal Reserve interest rate (Ifed), the research team examines the impact of exchange rates on endogenous variables in the model and considers the reaction of inflation and economic growth on various shocks. Based on the quantitative results, the research team will recommend some discus-sions to contribute for the improvement of Vietnam's macro environment, trade balance, inflation control, and economic growth support; implementing the goal of macroeconomic stability to suit the period of international economic integration and improving national competitiveness.

The problems of the foreign exchange market and the global financial crisis, the European public debt crisis in 2008-2011 made the economy of Vietnam facing many macroeconomic instabilities. The escalating inflation in 2008 and 2011 posed many challenges for macroeconomic management, especially controlling inflation in Vietnam. The realization of macroeconomic stability and inflation control at a reasonable level from 2012 in Vietnam was assessed to bring about remarkable results. In this article, the authors reviewed the studies of International and Vietnamese inflation, pointed out to the macroeconomic factors affecting inflation in Vietnam. At the same time, the authors used the VAR model to examine the impact of macroeconomic factors including money supply, credit, exchange rates, interest rates, real gross domestic product, international prices, inflation and give some discussions from the VAR model results.

In this article, the research team systematized the theoretical basis of the monetary transmission mechanism and the impact of interest rate channel in monetary transmission mechanism by Mishkin's approach and used the vector error correction model (VECM) to test the impact of interest rate channel in the monetary transmission mechanism in Vietnam in the period 2005 – 2019. There were 8 endogenous variables included in the VECM model; namely Consumer price index (CPI); Gross domestic product (GDP) at constant 2010 prices (GDPR); Money supply (M2); Refinancing interest rate (ISBV); Average lending interest rate in VND (ILR); Bilateral real exchange rate (ER); Credit to the economy (CRE); VN-Index (VN-INDEX); and, 2 exogenous variables: world consumer price index (PW) and US Federal Reserve interest rate (IFED). The results have shown that: money supply had a clearer effect on average lending interest rate than refinancing rate; Interest rate channel was an important channel to transfer the impact of monetary policy on inflation; Exchange rate and interest rates channel influenced economic growth in Vietnam more strongly than credit and financial asset prices channel did. Besides, the model results also confirm that in Vietnam, inflation in the past played an important role in determining current inflation.