The Vietnamese Ministry of Finance (MoF) has voiced its objection after Moody's Investors Service changed the country’s rating outlook to negative although the Vietnamese government has made great efforts to improve the coordination and transparency around debt management.

Inside the headquarters of the Vietnamese Ministry of Finance

Moody’s late on Wednesday confirmed the Government of Vietnam's Ba3 local and foreign currency issuer and senior unsecured ratings, but changed the outlook to negative, concluding the review for downgrade that was initiated on October 9, 2019.

“The negative outlook reflects some ongoing risk of payment delays on some of the government's indirect debt obligations, in the absence of more tangible and significant measures to improve the coordination and transparency around debt management within the administration,” the rating agency said in a statement.

In a release shortly after the Moody’s announcement, the MoF argued that Moody’s lowering the outlook based just on a single incident regarding the Vietnamese government’s provisional debt obligations without taking into account the country’s socio-economic achievements, improved resilience against external shocks and enhanced sustainability of the public debt portfolio is “inappropriate.”

The ministry noted government agencies have taken timely measures to improve administrative coordination in debt payments, ensuring no loss to the Creditors.

It also reiterated the government is always serious about meeting commitments to timely debt payments with development partners and international financial institutions.

In the time ahead, the Government of Vietnam will continue to pursue the goal of strengthening the macroeconomic foundation, boosting institutional reforms to ensure debt affordability and national financial security, the MoF asserted.

The ministry affirmed it stands ready to provide transparent information and convincing evidence of the Vietnamese government’s serious commitment to debt payment so that for Moody’s and other rating agencies have sufficient information and accurate and positive view on Vietnam’s credit profile.