Moody's: Vietnam view negative

Moody's Investors Service said that the outlook for the Vietnamese government's Ba3 foreign- and local-currency bond ratings is negative as the effects of the global recession and re-emerging inflationary expectations are destabilizing external balances.

Credit challenges are considerable enough to justify a negative outlook, Moody's said it said it said, but Vietnam's credit fundamentals have not yet moved out of the comfort zone for a Ba3 rating.

The efficacy of the authorities' policy tightening and the path of recovery in global trade will be key determinants to the outlook, the agency said.

Moody's noted that the ratings reflect progress made in externally oriented policies and state enterprise restructuring and reform.

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