The government plans to sell US dollar-denominated
bonds this month to raise funds to help stem an economic slowdown,
according to a statement released by the Ministry of Finance Tuesday.


The ministry and the central bank would soon decide on
the value of the sale and the coupon rate so that the bonds can be
issued before March 15, it said.


The country is “having difficulties in foreign
currency for some important investment projects,” Deputy Minister of
Finance Nguyen Cong Nghiep said at a press briefing.


Prime Minister Nguyen Tan Dung approved the sale of
the debt in the local market, according to a February 14 statement
posted on the government’s website.


The central bank has ordered commercial banks to prepare funds to buy dollar bonds.


The banks should “coordinate closely with the State
Bank of Vietnam's Foreign Exchange Department and Ministry of Finance
in the debt issues to ensure the success of the bond issuance,” Deputy
Governor Nguyen Van Binh said in a letter to them Monday obtained by
Reuters.


Fixing of dollar one-year lending rates stood at 2.55
percent on Monday on the interbank markets, down from 2.59 percent a
week ago, according to Reuters data.


VND55 trillion bond issue Ok’ed


The National Assembly has approved a plan to raise
VND55 trillion (US$3.15 billion) by selling bonds this year to fund
extra spending and bolster economic growth.


The government will sell VND11.5 trillion more than
the originally planned VND43.6 trillion, of which VND7.7 trillion was
carried over from last year. The Ministry of Planning and Investment
submitted the proposal, according to a statement dated Tuesday and
posted on the Vietnam Banks Association’s website.


“The approval will increase the supply in the debt
market and the government bond yields are expected to keep rising in
the short-term,” said Tran Kieu Hung, a Hanoi-based trader at Bank for
Investment & Development of Vietnam.


The yield on the benchmark five-year note climbed 0.04
percent to 8.98 percent yesterday, the highest level since January 14,
according to a daily fixing price from seven banks compiled by
Bloomberg.


Vietnam needs funds to revive its economy, which last
year expanded at the slowest pace since 1999. The government is
preparing an economic stimulus package of as much as $6 billion, some
of which woud be raised through bond sales, Nguyen Duc Hoa, deputy
minister of Planning and Investment said December 31.


The state treasury said February 4 that it may
increase local-currency bond sales by 6 percent to VND22 trillion in
the first quarter to fund the stimulus measures.


The economy would worsen in 2009 as the global financial crisis deepens, Prime Minister Nguyen Tan Dung said February 4.