Vietnam’s credit rating was raised to three levels below investment grade by Fitch Ratings, which said the country’s macroeconomic stability has improved.
The company raised its rating on Vietnam’s long-term foreign and local currency debt to BB- from B+, and revised the outlook to stable from positive, it said in a statement today. Standard & Poor’s already rates Vietnam at BB-, while Moody’s Investors Service raised its assessment in July to B1, four steps below investment grade.
“Vietnam’s macroeconomic policy mix has moved towards policies aimed at achieving macroeconomic stability,” Fitch said. “Macroeconomic stabilisation has contributed to a sharp turnaround in the current account from a deficit of 3.7% in 2010 to a projected surplus of 4.1% in 2014.”
Vietnam’s economy expanded 5.62% in the nine months through September from the same period a year earlier. The government cut policy interest rates twice this year, aiming to boost full-year economic growth to 5.8 percent in 2014 and 6.2% next year. Government bonds had a fifth monthly gain in October after inflation eased for a fourth month to the slowest pace since 2009.
The yield on the benchmark five-year government notes fell one basis point to 5.16% today, according to prices from banks compiled by Bloomberg. The dong weakened 0.1% to 21,290 against the US dollar as of 3:55pm local time.
“The rating upgrade will boost investors’ confidence, especially foreign ones, and spur them to increase holdings of Vietnamese bonds,” Do Ngoc Quynh, the head of treasury at Hanoi-based Bank for Investment & Development of Vietnam, said by telephone today. “Fitch’s upgrade helps strengthen the recent uptrend of the notes in the local market.”
Source : Bangkok Post | November 4, 2014