Vietnam focuses on long-term G-bond sales
The Saigon Times Daily
HCMC – The Government’s finance agencies will concentrate on selling long-term government bonds to mobilize VND340 trillion (over US$15 billion) this year, the Vietnam News Agency reports.
Of the figure, the Government will set aside VND184 trillion to finance the budget deficit and VND156 trillion for debt service.
The central bank has issued Circular 06/2016/TT-NHNN revising and supplementing some articles of Circular 36/2014/TT-NHNN on safety ratios at credit institutions and foreign bank branches. Therefore, foreigners have shown more interest in the local G-bond market, said the State Treasury.
In recent times, the State Treasury has offered G-bonds with diverse tenors from three to 30 years, focusing on papers having terms of five years or longer to reduce debt service pressure in the near term.
According to a report of the Finance Ministry, G-bonds of five years or longer accounted for 91.1% of total sales in 2016, higher than the minimum level required by the National Assembly at 70%. Bond yields averaged out at 6.49% per annum.
At the end of 2016, domestic debt accounted for 59% and external debt 41%, meeting the Government’s goals. The nation also reduced dependence on foreign loans.
Last year, the agency issued nearly VND282 trillion worth of G-bonds, mobilized VND55 trillion from social insurance premiums, while disbursement of official development assistance (ODA) loans and other kinds of aid reached US$1.9 billion.