Vietnam May Hold off Overseas Bond Issuance Plan till Early 2016

Tuan Minh

16:11 03/12/2015

BizLIVE - The Vietnamese Ministry of Finance will likely postpone a plan to issue $3 billion worth of sovereign bonds abroad even the government is struggling to cover the budget deficit.

Vietnam May Hold off Overseas Bond Issuance Plan till Early 2016

Vietnam's Ministry of Finance has not decided on the timing for the $3-billion bond issuance plan. (Photo:

The Saigon Times newspaper cited a finance ministry source as saying that the ministry needs more time to ponder exchange rate risks.
As the U.S. dollar appreciates against the Vietnamese dong and interest rates on USD-denominated loans rise, dong-denominated debts will swell, weighing on the state budget.   
The Vietnamese legislative body last month allowed the government to sell up to $3 billion in sovereign bonds in the international market, aiming to roll over domestic debts in the 2015-2016 period.
The greenback has strengthened against other currencies, fueled by speculation of an interest rate liftoff by the U.S. Federal by this year-end.
The U.S. Dollar Index, a measure of greenback value against six foreign currencies including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, increased 3.4% in November, the sharpest rise since January.
Meanwhile, appetite for government bonds at home has strengthened after the parliament permitted the government to resume issuing short-term securities. Some 45 trillion dong ($$2 billion) worth of three-year bonds is expected to be launched for sale in the last quarter of 2015, making the 250-trillion dong issuance target feasible this year.


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