In Hanoi, on April 12, 2018, the State Bank of Vietnam (SBV) and the International Finance Corporation (IFC) jointly organized a consultative workshop on the proposal of issuing international bonds in association with Vietnamese Dong (the Lotus Bond). The workshop was under the co-chairwomanship of SBV Deputy Governor Nguyen Thi Hong and Ms Nena Stoiljkovic, IFC Vice President for Asia and Pacific.
Also attending the workshop were representatives from the SBV departments, including the International Cooperation Department, the Monetary Policy Department, the Credit Department, the Foreign Exchange Management Department, the Department of Legal Affairs, the Banking Operations Center, etc. On the IFC side, there were Mr. Kyle Kelhofer, IFC Senior Country Manager for Vietnam, Laos and Cambodia, and specialists from IFC Unit for Development Finance. Especially, the workshop was also attended by experts and representatives from Vietnam Bond Market Association (VBMA), the State Securities Commission of Vietnam (SSC), etc.
In her opening speech, Deputy Governor Nguyen Thi Hong said: “Vietnam has always considered the private sector to be of particular importance as it has the potential to develop its strengths and resources to effectively support the State sector as well as the overall development of the economy. This has been reflected in many Directives, guiding documents of the Party and the State; especially Resolution No.10-NQ/TW of the recent 5th Plenum of the Party Central Committee has emphasized the objective of developing the private economy to become an important driving force of the socialist-oriented market economy.”
Deputy Governor Nguyen Thi Hong speaks at the opening session of the workshop
The Government of Vietnam highly appreciates the IFC's support to Vietnam in recent years. The IFC's activities and orientations are fully in line with the development policy of Vietnam. For the banking sector, the IFC has been a big investor, a companion, and has contributed significantly to the development of the whole system. Deputy Governor Nguyen Thi Hong highly valued the technical support that the IFC has extended to the SBV during the past time and said that the demand for technical support from the SBV subsidiary units is still very high. In the coming time, the SBV hoped the IFC would continue to provide further support as well as call for funding from other international organizations to contribute to the consolidation and enhancement of the operational efficiency of the SBV units.
A snapshot of the workshop
Speaking at the workshop, Ms Nena Stoiljkovic, IFC Vice President for Asia and Pacific said: “The program of issuing international bonds is an activity within the IFC’s strategy with the aim of supporting the development of the private sector in the member countries. According to the program, the IFC has put forward a plan to issue international bonds in association with the Vietnamese Dong, which are transacted in US dollar in the international markets. The fund collected from the first issuance (estimated at USD 100 million) will be converted into VND in the forex market and used for investment activities in Vietnam.”
The IFC Vice President for Asia and Pacific emphasized that the IFC has demonstrated its ability to create markets that can catalyze foreign investments in the domestic private sector. Investors such as foreign wealth funds and central banks are typical clients in the IFC's USD Bonds, and may be attracted by the IFC's Lotus Bonds, which in turn attract more new foreign investment into the capital market of Vietnam. The Lotus Bonds will also allow foreign investors to access more easily to their VND investments and also offer them diversification of their portfolios.
Ms Nena Stoiljkovic, IFC Vice President for Asia and Pacific, speaks at the workshop
The Workshop was aimed at (i) introducing the IFC’s plan of issuing bonds (scale, purposes, mechanism, benefits, impacts…); (ii) explaining/clarifying the SBV’s concerns with regard to the bond issuance program; (iii) the domestic legal basis relating to bond issuance plans, the legal basis for the IFC to request the SBV to give its opinion on the bond issuance plan; (iv) the benefits that the bond issuance program brings to Vietnam and to the investors.
Specialists from IFC Unit for Development Finance present at the workshop
At the Workshop, the IFC specialists presented the specific plan of issuing bonds and clarified many concerns from the participants.
Le Hang