Government to issue bonds denominated in US dollars

The Government will issue bonds denominated in US dollars to fund key national projects and help offset the State budget deficit, it was announced Friday.

Decision 211/QD-TTg, signed by Prime Minister Nguyen Tan Dung, directs the Ministry of Finance to determine the amount of money to be raised in each phase of the bond issue, based on capital requirements.

The bonds will be sold to organisations and individuals legally residing and operating in Viet Nam, with both interest and principal paid in US currency. The Minister of Finance will determine the terms of each bond issue, as well as interest rates in consultation with the governor of the State Bank of Viet Nam, and the bonds will be listed and freely traded on the stock exchange.

"The decision is a legal framework for the Ministry of Finance to raise capital. The ministry will issue the bonds when the timing is favourable," the head of the ministry's finance and banking department, Ngo Tuan said yesterday.

"Investors will buy bonds if the foreign currency is stronger because they'll make money. They won't buy bonds if the foreign currency is weaker because they'll lose money," commented Kevin Snowball from PXP Viet Nam Asset Management.

(Source: VietNamNet/Viet Nam News)