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

The issuance of Government bonds is one of the important channels to ensure capital sources for socio-economic development requirements. - Illustrative image (Photo: VNA)

Experts and economists have proposed to expand the issuance of Government bonds to the international market, saying that this will help increase oppotunities to mobilise investment flows for socio-economic development projects of Vietnam in the time to come.

Addressing a workshop in Ho Chi Minh City on April 27, head of the Prime Minister's economic advisory group Nguyen Duc Kien highlighted the need to attract investment sources, especially for infrastructure and socio-economic development.

Vietnam has great demand for capital to develop key infrastructure projects, especially those serving transport and information technology, they said.

They 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 13 billion USD and 2.5 billion UDS per year, respectively.

If only relying on the domestic capital market, it will 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, Vietnam is considered a reputable partner on 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, Vietnam has issued Government bonds on the international capital market for 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 issue flexibly international bonds in different currencies and volumes at different times.

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

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

However, he also warned about risks related to the national currency security, stressing that it is necessary to study and prepare scenarios to deal with risks if any./.