Market Summary

Yield Movements

Local currency (LCY) government bond yield curve in Viet Nam was relatively steady between 3 March and 30 May, amid market expectations that the State Bank of Vietnam will keep its refinancing rate unchanged, at least through the first half of 2025, to foster economic growth. On 6 April, the government maintained its full-year 2025 growth target of at least 8.0% despite global trade uncertainties, following 7.1% growth in 2024. The State Bank of Vietnam has held the policy rate steady at 4.50% since June 2023.

Local Currency Bond Market Size and Issuance

Growth in the LCY bond market slowed to 1.9% quarter-on-quarter (q-o-q) at the end of March, reaching a size of VND3,222.5 trillion. Slowed growth was largely driven by a sharp decline (-32.1% q-o-q) in outstanding central bank securities due to a large volume of maturities. Corporate debt stock also grew at a slower pace of 1.0% q-o-q compared to 4.4% in the previous quarter amid low volume of issuance in the first quarter (Q1) of 2025. In contrast, Treasury and other government bonds grew 4.4% q-o-q at the end of March, supported by increased government borrowing to foster economic growth. Total LCY bond issuance rebounded in Q1 2025, climbing 33.0% q-o-q on higher debt sales by both the government and the central bank.

Sustainable Bond Market

Viet Nam's sustainable bond market comprises green and sustainability instruments issued solely by the private sector, accounting for 52.2% and 47.8%, respectively, of the total sustainable debt stock at the end of March. Outstanding sustainable bonds reached USD1.1 billion in Q1 2025 and were highly concentrated in tenors of 1-3 years (61.7%). This led to a size-weighted average tenor of 2.7 years, among the shortest across emerging East Asian sustainable bond markets.