Vietnam Plans To Sell VND47 Tln In Govt Bonds This Year
HANOI -- Vietnam's Ministry of Finance said Thursday that it plans to sell nearly VND47 trillion in government bonds this year, about 1.5 times more than in the last year.
"We need (to issue) those bonds to help cover budget deficits and also to provide more state funds for key infrastructure investment projects," a ministry official told Dow Jones Newswires.
The State Treasury will issue VND11 trillion in dong-denominated bonds and another VND1.5 trillion in five-year education bonds to fulfill plans of raising VND3 trillion for the country's education-development program between 2003 and 2005, he said.
Other government agencies, including the Development Assistant Fund, and state-owned corporations will issue the rest.
In principle, the government has also allowed the ministry to be the guarantor for the issue of dollar-denominated bonds in the domestic market this year, but the ministry hasn't decided details on the size and timing of such issues.
"Some infrastructure projects might issue dollar bonds because they need to import equipment, but it's still premature to say about how much dollar funds they would need."
Vietnamese organizations issued about VND30 trillion in bonds last year, of which dollar bonds were valued at $50 million.
The ministry official said that Vietnam is still considering an issue of sovereign bond overseas, but declined to elaborate. If it does go ahead, it will be the country's first overseas sovereign bond.
Vietnam first broached the idea of a global bond in 2002, but hasn't made progress on the matter.
According to an executive with a Hanoi-based state-owned commercial bank, the chances of a sovereign global bond this year remain slim, because "our current account and financial position are strong and stable, thanks to good inflows of dollar funds."
Vietnam's trade deficit was $5.52 billion last year, but it also received about $3 billion in remittances from overseas workers, according to government figures.
-By Nguyen Ham Muoi, Hanoi Bureau, Dow Jones Newswires; 844-8250732; email@example.com
-Edited by Ven Ram