Moody's upgrades Vietnam's credit rating

• July 30, 2014 14:43

Credit rating agency Moody's has just announced an upgrade of Vietnam's credit rating.Specifically, the credit rating for government bonds was increased by one level, from B2 to B1 and the outlook was assessed as "stable".

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The credit ceiling for long-term foreign currency bonds issued by Vietnam was raised from B1 to Ba2, and the credit ceiling for long-term foreign currency deposits was raised from B3 to B2.

Explaining the credit rating upgrade, Moody's said that Vietnam's macro economy has remained stable since 2012; price index and economic growth, although slowing down compared to the past two decades, are still high compared to countries in the same rating group.

In addition, the strong growth of the foreign-invested sector as well as the production and trading of export products has contributed to maintaining the economic growth rate. The diversification of high-value export items has helped improve the balance of payments and Vietnam's foreign position. Together with the lower growth of import turnover, the current account balance has shifted from deficit to significant surplus, contributing to increasing foreign exchange reserves to a peak of 35.9 billion USD at the end of April 2014 and maintaining exchange rate stability. At the same time, the banking sector's operations have gradually stabilized, limiting the risk to the Government's budget.

According to the Ministry of Finance, Moody's upgrade of Vietnam's credit rating shows that the organization believes that Vietnam's macro-economy will continue to be maintained stably, which will be a positive factor for the restructuring of the banking system and the country's ability to repay foreign debt.

According to chinhphu.vn