Market Summary

Yield Movements

Viet Nam's local currency (LCY) government bond yields fell for all tenors between 2 September and 31 October, driven by the State Bank of Vietnam's (SBV) accommodative monetary policy stance. On 17 October, the SBV signaled its openness to reduce the policy rate to support the economy, as the government aims to lift annual economic growth above 7.0% in 2024. Furthermore, the SBV lowered its interest rate for open market operations to 4.00% to support businesses and encourage borrowing.

Local Currency Bond Market Size and Issuance

At the end of the third quarter of 2024, LCY bond market grew 3.1% quarter-on-quarter (q-o-q) to VND3,010.0 trillion driven by strong issuance during the quarter. Treasury and other government bonds outstanding grew 5.3% q-o-q, while total corporate debt stock rebounded strongly with growth of 8.4% from the previous quarter. Strong issuance from all bond segments amid lowered interest rate in open market operations propelled the total LCY bond issuance to grow 35.0% q-o-q to VND992.8 trillion in the third quarter of 2024.

Sustainable Bond Market

Sustainable bond market in Viet Nam mainly comprises foreign-currency-denominated green and sustainability bond instruments issued solely by corporates. Over 78.0% of total sustainable bonds outstanding at the end of September were denominated in a foreign currency and carried tenors of 3 years or less, resulting in a size-weighted average tenor of 2.7 years.