Approval of the Medium-Term Debt Management Program

According to the Medium-Term Debt Management Program 2013-2015 just approved by the Prime Ministerapprove, strive by 2015, public debt will not exceed 65% of GDP, in which government debt will not exceed 50% of GDP and the country's foreign debt will not exceed 50% of GDP.

In addition, domestic and foreign loans to offset the State budget deficit will be used in the direction of gradually reducing the State budget deficit, striving to reduce it (including Government bonds) to below 4.5% of GDP by 2015. Of which, in 2013 it was 4.8% of GDP; in 2014 it was about 4.7% of GDP.

Ensure that the ratio of State foreign exchange reserves to the country's total short-term foreign debt is over 200% annually.

Short-term loans may not be used to invest in medium and long-term projects.

One of the solutions of the Program is to organize the mobilization of additional loans to balance the State budget and invest in socio-economic development, in which it is necessary to balance the needs and effectively implement the plan to mobilize and use domestic and foreign loans of the Government in the period of 2013-2015, prioritizing the selection of long-term loans, with low borrowing costs and reasonable risk levels.

In addition, continue to control the capital mobilization limit of local authorities according to current laws on State budget management.

Enterprises and credit institutions have the responsibility and obligation to use loans for the right purposes, are not allowed to use short-term loans to invest in medium and long-term projects, bear all risks and be responsible before the law in the process of mobilizing, using loans and repaying debts on time.

Strengthening risk management and restructuring some public debts. Specifically, studying options for handling exchange rate risks and floating interest rate swaps for some debts in the current public debt portfolio; organizing the classification of credit-risk debts and issuing criteria for assessing and ranking the repayment capacity of re-borrowers and guaranteed persons;...

Improve the efficiency of using loan capital for re-lending

Another solution of the Program is to strictly control the issuance and management of Government guarantees, and for the time being, not to consider guaranteeing the issuance of international bonds. Enterprises or commercial banks, if in need, should proactively issue international bonds without Government guarantees.

In addition, only consider granting domestic loan guarantees for urgent projects and key national projects that have been decided to be granted guarantees by the Prime Minister.

To improve the efficiency of using loan capital for re-lending, it is necessary to strengthen the risk-sharing mechanism between the State and enterprises and investors; between the Government and local authorities for foreign loans of the Government for re-lending.
In addition, expand the re-lending mechanism to local authorities to enhance local initiative and responsibility, while ensuring fair treatment among localities.

The use of re-lending capital must be selective, avoiding spreading, focusing on high priority projects, programs and works; continuing to focus on efficiency criteria when selecting each specific project.

Strengthen the application of re-lending methods through credit limits for qualified commercial banks in cases where sponsors lend not in the form of project financing, in order to enhance the responsibility of re-lending agencies as well as re-borrowers.

According to (Chinhphu.vn) - LT