VietNamNet Bridge - To make up the budget deficit, the government needs to issue bonds to raise funds from the public rather than borrow money directly from the central bank, economists say.

Though Vietcombank is not the only large and powerful commercial bank in Vietnam, it was still chosen by the State Bank as the buyer in a deal issuing $1 billion worth of government bonds in dollars.

VietNamNet Bridge - The latest dong one-percent devaluation on May 7, though described as “unavoidable”, has raised controversy, because this will lead to a heavier public debt burden.

VietNamNet Bridge - Some economists have warned that if the government borrows money from the national foreign exchange reserves, the dong’s strength will be affected.

VietNamNet Bridge - Many banks have announced they will not pay 2014’s dividends to shareholders, even though they have declared trillions of dong in profit. This has raised doubts about the status of the banks’ health.  

The State Bank of Viet Nam (SBV) officially acquired Ocean Bank on May 8, gaining all its equity, including its charter capital of some VND4 trillion (US$190.48 million).

The dollar price on May 6 hit the ceiling of VND21,673 per dollar, the highest ever level. The State Bank once again attributes this to people’s anxiety. Experts believe the dong 2 percent devaluation plan in 2015 is not feasible.

VietNamNet Bridge - The government has instructed the State Bank of Vietnam to work with relevant ministries to design a mechanism to lend money from national foreign exchange reserves to the government to serve spending.

VietNamNet Bridge - All the barricades that prevent foreign investors from buying bad debt from Vietnamese commercial banks have been removed, but everyone is still moving slowly and cautiously.

VietNamNet Bridge - The State Bank’s decision to buy Ocean Bank at zero dong means that PetroVietnam, the national oil and gas group, will incur a complete loss in the investment deal.

VietNamNet Bridge - Vietnam expects to have a surplus of $5 billion in international payments in 2015, which means there will be enough dollar supply in the domestic market.

VietNamNet Bridge - The State Bank of Vietnam (SBV) has had to pump a large amount of dong through the open market operation (OMO) to ease a “dong fever” in the interbank market.

VietNamNet Bridge - The State Bank of Vietnam’s (SBV) announcement to determine the dividends commercial banks can pay to their shareholders has raised controversy about its legitimacy.

VietNamNet Bridge - Commercial banks’ provisioning costs have been increasing, even though bank restructuring has been proceeding well.

VietNamNet Bridge - The dollar price has been increasing for a month, while the official dong/dollar exchange rate remains unchanged as the State Bank has committed not to devalue the dong by more than 2 percent in 2015.

VietNamNet Bridge - Small banks merging with big banks to form stronger institutions is a growing trend in Vietnam.

VietNamNet Bridge - Though domestic lending interest rates have decreased sharply since 2014, Vietnamese businesses are still seeking offshore loans because of the lower capital needed.

VietNamNet Bridge - More and more foreign bankers are flocking to Vietnam, while the existing bankers have been trying to expand their business in the country.

The State Bank of Vietnam (SBV) does not plan to adjust the dong/dollar exchange rate now because this would place a heavier burden of foreign debt on the government and businesses. 

VietNamNet Bridge - The weaker euro and lower consumer spending are making it more difficult for Vietnamese exporters to enter the European market.