Vietnam declines US$1.2 billion high-interest foreign loans

The Ministry of Finance last year turned down eight foreign loan programs and projects worth a staggering US$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 totaling US$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 US$2.98 billion. Besides, as many as 17 on-lending programs were worth US$2.29 billion, double that in 2016.

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

SGT

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