VN looks to promote issuance of Gov’t bonds on int’l market

Experts and economists have proposed expanding the issuance of Government bonds to the international market, saying this will help increase opportunities to mobilise investment for socio-economic development projects.

 

Addressing a workshop in HCM City on Tuesday, the head of the Prime Minister's economic advisory group Nguyen Duc Kien highlighted the need to attract investment, especially for infrastructure and socio-economic development.

Viet Nam has great demand for capital to develop key infrastructure projects, especially those serving transport and information technology, the participants said.

The experts pointed out a number of projects that will need great investment sums, including a national power planning project in 2021-2030 and a draft plan on road traffic network development in 2021-2030, with a vision to 2050, which require about US$13 billion and $2.5 billion per year, respectively.

If only relying on the domestic capital market, it would be difficult to meet the large capital needs for investment in economic infrastructure, which requires medium and long-term capital, they added.

According to Kien, Viet Nam is considered a reputable partner in the international financial market as it has always paid debts on time.

Notably, interest rates are currently kept low in international capital markets, making it easier for the Vietnamese Government to issue bonds with lower nominal interest rates, save costs and reduce pressure on debt payment.

Since 2005, Viet Nam has issued Government bonds on the international capital market three times with positive results. This has helped strategy makers to learn from experience and lessons.

The group said the Government should consider a plan to build a global medium-term bond issuance programme, which will allow the Government to flexibly issue international bonds in different currencies and volumes at different times.

Participants also underlined the need to build a mechanism for the effective use and management of capital sources after issuance.

Financial expert Tran Ngoc Tho said the issuance of Government bonds is an important channel to ensure capital sources for socio-economic development requirements.

However, he also warned about risks related to national currency security, stressing it is necessary to prepare scenarios to deal with risks.

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