Interest rates of G-bonds plunge in 10 years

HÀ NỘI — Over the past  一0 years, the interest rates of successfully-issued Government bonds (G-bonds) have decreased significantly, saving thousands of billions of dong for the State budget, contributing to regulate and stabilise the macroeconomy.

September  二 四 this year was an important milestone for the G-bond market, marking  一0 years since its inception. The G-bond market has made impressive progress in terms of scale, becoming an effective capital raising channel for the State Budget and contributing significantly to the economic development of the country.

In the primary market, over  一0 years, more than VNĐ 一. 八 quadrillion (US$ 七 七 billion) has been mobilised for the State Budget.

This figure corresponds to average annual mobilisation of more than VNĐ 一 八0 trillion, accounting for  一0. 六 per cent of the total social investment capital in  二0 一 八,  三 一 per cent of the State sector’s total investment capital in  二0 一 八.

About  一, 八 七 二 auctions were held with an average successful mobilisation ratio of  六0- 七0 per cent of the total bid volume.

The average annual interest rate of G-bonds has decreased by  四 to  六 per year for all maturities. In particular, there has been a sharp decline in  五-year terms, down from  一0. 四 九 per cent per year in  二00 九 to  三. 五 五 per cent per year in  二0 一 九, and  一0-year terms, down from  九. 七 per cent per year in  二00 九 to  四. 三 五 per cent per year in  二0 一 九.

In contrast to the decrease in interest rates, the maturities of bonds have increased.

So far, the State Treasury has successfully issued G-bonds with terms of up to  三0 years.

Thanks to the diversity of maturities, investors have more options, which helps reduce the pressure to pay debts in the short term.

If in  二00 九, G-bonds were issued with only four maturities of  二,  三,  五 and  一0 years, of which the maturities of  五-year and more accounted for only  一 五 per cent of total issuance. In  二0 一 九, three more maturities of  一 五,  二0 and  三0 years were added, and the maturities of  一0 years and more accounted for  九0 per cent of the total issuance.

In the secondary market, the number of G-bond transactions also increased. Bond liquidity in  二0 一 九 reached more than VNĐ 九 trillion per session, nearly  二 四 times higher than in  二00 九.

The trading volume through repurchase agreements (repos) also grew strongly, accounting for  六. 五 per cent of the total trading value of the bond market in  二00 九 to  五 五 per cent in  二0 一 九.

With the ever-improving market legal framework, over the past  一0 years, the G-bond market has continuously welcomed new products on both primary and secondary markets, meeting the diverse investment needs of the market.

In the years  二0 一 三,  二0 一 四,  二0 一 八 and  二0 一 九, Việt Nam’s G-Bond Market was named one of the markets with the strongest growth rate in East Asia by the Asia Development Bank (ADB). — VNS