Vietnam declines $1.2 billion high-interest foreign loans

11-Jan-2018 Intellasia | SGT | 6:00 AM Print This Post

The Ministry of Finance last year turned down eight foreign loan programmes and projects worth a staggering $1.2 billion given their high interest rates, heard a conference in Hanoi City on January 3.

Hoang Hai, deputy head of the Department of Debt Management and External Finance under the finance ministry, said that since July 2017 Vietnam has not got aid from the International Development Association, which provides concessional loans and grants for developing countries.

Therefore, Vietnam has come under enormous pressure to seek loans at low interest rates from foreign donors.

Meanwhile, the government has no way but to continue borrowing loans in order to finance large-scale public projects. Many investors have accepted high rates to meet their capital demand.

Therefore, the Department of Debt Management and External Finance is striving to seek preferential loans. However, it always rejects loans with high rates. Notably, the department rejected loans totalling $1.2 billion last year because of high interest rates.

The finance ministry was on the behalf of the government to sign 32 foreign loan agreements worth a combined $2.98 billion. Besides, as many as 17 on-lending programmes were worth $2.29 billion, double that in 2016.

Public debts which were put under stricter control totalled VND3,068 trillion as of late last year, representing 61.3 percent of gross domestic product (GDP) and below 63.6 percent in 2016.

The finance ministry amended its strategy for public debt management until 2010 with a vision to 2030, and its medium-term public debt management plan for the 2016-2020 period in line with the current situation and credit guarantee approval rules.

Finance minister Dinh Tien Dung told the department to find better methods to control rising public debts and pay principals for loans. billion-high-interest-foreign-loans.html


Category: Economy, Vietnam

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