The size of the local Government bond (G-bond) market by the end of last month was equal to 25.1% of the country’s gross domestic product in 2019, marking a 12-fold increase over 2009.
Some G-bond notes issued by the Ministry of Finance. The size of the local G-bond market is equal to 25.1% of the country’s GDP
At a conference on the 10-year development of the G-bond market, held in Hanoi on December 10, Phan Thi Thu Hien, director of the Ministry of Finance’s Department of Banking and Financial Institutions,noted that the local G-bond market has developed significantly in terms of size and liquidity and has played an important role in capital mobilization, news site Vietnamplus reported.
According to statistics from the Ministry of Finance, the average transaction volume in the January-November period of this year reached VND9 trillion (US$388.1 million) per session, 24 times higher than that in 2009.
The local G-bond market expanded at an average of 27% per year over the last decade, the highest growth rate among emerging economies in East Asia, Hien added.
The G-bond market has become an effective medium- and long-term capital mobilization channel for the State budget.
In the last decade, VND1.96 quadrillion was mobilized through G-bond sales, or VND175 trillion per year. In addition, nearly VND385.2 trillion in Government-guaranteed bonds and VND36.9 trillion in municipal bonds were raised in the 10-year period.
Regarding the market development plan for the 2021-2025 period, Hien said the Government would continue prioritizing methods to boost internal strengths and stabilize the macroeconomy to ensure rapid and sustainable economic growth.
To achieve this target, Vietnam will continue executing the bond market development plan for the 2017-2020 period, with a vision toward 2030. Accordingly, Vietnam aims to increase the trading volume of G-bonds, Government-guaranteed bonds and municipal bonds per session to 1% and 2% of the outstanding balance of listed bonds by 2020 and 2030, respectively. SGT
Foreign investors have made a net purchase of VND15.2 trillion worth of government bonds so far this year, according to SSI Retail Research.