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Credit rating progresses to achieving 'Investment' rating
Việt Nam's national credit rating is making significant strides toward achieving the official 'Investment' ranking.
Truong Hung Long, Director of the Department of Debt Management and External Finance under the Ministry of Finance, speaks at the seminar. — Photo tapchitaichinh.vn
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This was emphasised during the seminar titled 'National Credit Rating and Investor Relations' organised by the Ministry of Finance's Department of Debt Management and External Finance and the German Development Cooperation Organisation (GIZ) on Wednesday in Hà Nội.
At the seminar, the Director of the department Trương Hùng Long noted that after more than two years of implementing the Project on Improving National Credit Rating for 2030, Việt Nam has seen positive results.
This progress highlights the country’s ongoing efforts to enhance its creditworthiness and attract more foreign investment.
Resilience amid global fluctuations
In the context of global economic fluctuations in 2022, many countries experienced significant instability due to geopolitical conflicts, leading to downgrades from credit rating agencies.
However, Việt Nam remained an exception. Both Moody's and S&P recognised Việt Nam's resilience, with S&P upgrading the country's rating from BB to BB+ and maintaining a 'Stable' outlook, while Moody's upgraded it from Ba3 to Ba2, also with an official 'Stable' outlook.
In 2023, Việt Nam received another upgrade from Fitch, moving from BB to BB+ with a 'Stable' outlook. This indicates that Việt Nam is now just one level away from achieving the desired 'Investment' rating according to S&P and Fitch and two levels away according to Moody's.
Long emphasised the benefits of improving a national credit rating, noting its positive impact on the overall economy. An enhanced credit rating strengthens the nation's reputation and fosters trust among international investors, which is crucial for reducing the cost of mobilising foreign capital.
With the decline in official development assistance (ODA) and preferential loans to Việt Nam, the importance of a strong national credit rating becomes more pronounced.
Head of the Project on Strengthening Public Financial Management under GIZ Vietnam, Arne Fraemk, said that Việt Nam was at a pivotal moment in its journey towards becoming a high-income country. Securing alternative financial resources was increasingly urgent as ODA inflows decrease.
Future outlook
During the seminar, delegates also discussed the interconnected issues of credit rating and investor relations.
Head of Global Official Organisations at Standard Chartered Bank, Karby Leggett, noted that now is an opportune moment for Việt Nam to address its national credit rating. The transition from a BB rating to a higher level could significantly reduce capital mobilisation costs, thereby attracting new investment and enhancing financial stability.
Leggett expressed confidence that Việt Nam will meet its credit rating target by 2030, based on discussions with the Government and data from credit rating organisations. This optimistic outlook points to strong belief in Việt Nam's economic progress and financial stability in the coming years.
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