return icon Vietnamnet.vn

Vietnam’s foreign debts rise rapidly on USD appreciation

VietNamNet Bridge - The nation’s foreign debts had reached VND2,451,978 billion as shown in the government’s report to the National Assembly on using loans and managing public debts as of the end of December 2017.
VietNamNet Bridge - The nation’s foreign debts had reached VND2,451,978 billion as shown in the government’s report to the National Assembly on using loans and managing public debts as of the end of December 2017.


{keywords}



With the official exchange rate of VND22,425 per dollar announced by the State Bank of Vietnam (SBV) on the last day of the last year, Vietnam’s total foreign debts had reached $109.34 billion.

As such, the nation’s foreign debt increased rapidly. The Public Debt Bulletin No 5 issued on August 23, 2017 showed Vietnam’s foreign debts by the end of 2015 was $80.84 billion, while it was $71 billion in 2014. This means that the foreign debt increased $10 billion year on year. Meanwhile, in 2016-2017, the average increase was $15 billion a year.

In previous years, the concern about risks caused by exchange rate fluctuations did not exist, because the dong/dollar rate was stable. 

As the dong is losing value against the US dollar, Vietnam’s foreign debts are getting bigger. According to Thoi Bao Kinh Te Saigon, the amount of money the state budget has to pay additionally for principal and interest this year could be trillions of dong because of the exchange rate fluctuations.

As the dong is losing value against the US dollar, Vietnam’s foreign debts are getting bigger. According to Thoi Bao Kinh Te Saigon, the amount of money the state budget has to pay additionally for principal and interest this year could be trillions of dong because of the exchange rate fluctuations.

The foreign debts incurred by businesses are an important part of the nation’s foreign debts. However, the Ministry of Finance (MOF) doesn’t show figures about foreign loans provided to Vietnam’s businesses.

Under the 2018 plan, the foreign loan limit for businesses and organizations is $5 billion, and businesses’ short-term outstanding loans must not surpass outstanding loans by December 31, 2017

An SBV official said FIEs have the highest demand for foreign loans. They borrow money either from holding companies or foreign banks.

In principle, enterprises have to register borrowing with the Forex Management Department. If the total loans registered by enterprises are higher than limits, SBV will discuss with MOF to adjust limits based on demand and debt payment capability.

This disbursement was low because of slow capital use and slow disbursement process.

FIEs prefer foreign loans to domestic loans because the lending interest rates are lower, while conditions are more flexible.

In 2017, Vietnam Beverage borrowed $5 billion to buy Sabeco shares, which led to the increase in the total foreign debts of the nation. If the company had not received the loan, Vietnam’s total foreign debts would have been $104.34 billion by the end of 2017.

Under the Public Debt Management Law, the nation’s foreign debts include foreign debts incurred by the government, foreign loans guaranteed by the government and foreign loans to enterprises.


RELATED NEWS

Foreign debt up 6.5-fold in 14 years

Vietnam's GDP growth cannot keep pace with an increase in public debt


Kim Chi

MORE NEWS

Successor for Coach Park Hang-seo to arrive in Vietnam soon

If the negotiations are successful, coach Philippe Troussier may sign a contract with the Vietnam Football Federation (VFF) this week, becoming the successor to coach Park Hang-seo to lead Vietnam’s national football teams.

Positive signs ahead for Vietnamese pangasius exports to US, China

Despite a significant fall in exports in 2022, there are bright prospects ahead for pangasius exports this year thanks high demand from China and the United States – the two major markets for Vietnam, according to insiders.

Vietnamese students win gold at Invention Creativity Olympic 2023

Four Vietnamese students from Le Hong Phong High School for the Gifted in the northern province of Nam Dinh won a gold medal at the World Invention Creativity Olympic (WICO) 2023, which recently concluded in the Republic of Korea (RoK).

MIC acts as cradle for digital tech firms to test their products

Minister of Information and Communications Nguyen Manh Hung stressed that MIC is the leading ministry in the Make-in-Vietnam campaign and serves as the cradle for technology firms to experiment with and develop products.

Hanoi among world's top culinary destinations in 2023

Hanoi was voted by readers of the world's largest travel platform Tripadvisor as one of the world's top 20 culinary destinations in 2023.

Vietnamese young people set off for military and public security service

In 2023, more than 4,200 young people in Hanoi will perform military and public security service.

VIETNAM NEWS HEADLINES FEBRUARY 6/2023

Improvement of consular services to continue: official

VIETNAM BUSINESS NEWS FEBRUARY 6/2023

Agro-forestry-fishery exports reach 3.7 bln USD in January

Sister Sister 2 to compete at 2023 Osaka Asian Film Festival

"Chị chị em em 2", known as “Sister Sister 2” in English, directed by Vu Ngoc Dang will represent Vietnam at the 2023 Osaka Asian Film Festival scheduled to get underway from March 10 to 19.

VN representative wins first runner-up title at Mrs Universe 2022

Hoang Thi Thanh Nga, the Vietnamese representative at Mrs Universe 2022, was awarded the first runner-up title during the beauty pageant’s grand final held in Bulgaria on February 5.

Proposal to allow HMC City hospital to culture SARS-CoV-2 virus

HCM City’s Health Department has proposed the Ministry of Health permit the city's Hospital for Tropical Diseases to culture the SARS-CoV-2 virus in its laboratory.

Vietnam's Phuoc Thinh finishes fifth at Mister Tourism World 2023

Vietnamese model Phung Phuoc Thinh claimed the fifth runner-up title at the Mister Tourism World male pageant which concluded in the Philippines on February 4.

Over 80% of real estate bonds have low creditworthiness: FiinRatings

Over 80% of real estate bonds have been issued by unlisted firms that are financially weak and have low transparency, said the credit rating agency FiinRatings.

Panama-flagged AH SHIN catches fire in Vietnamese waters

Relevant forces are attempting to put out a blaze which broke out on the Panama-flagged AH SHIN in the waters off Ba Ria – Vung Tau province, southern Vietnam.

Vietnam wins numerous ASEAN tourism awards

Many units of Vietnam were named in categories of the ASEAN Tourism Awards at a ceremony held as part of the ASEAN Tourism Forum (ATF) 2023, which wrapped up in Jakarta, Indonesia on February 5.
back_to_top