Fitch affirms VN’s credit rating

VGP - Fitch Ratings has affirmed Việt Nam’s long-term foreign-currency issuer default rating (IDR) and long-term local-currency IDR at 'B+' while assessing that the country’s outlook on the ratings is stable.

August 11, 2011 7:09 PM GMT+7

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The country ceiling has also been affirmed at 'B ', and the short-term foreign-currency IDR at 'B'.

Việt Nam's sovereign creditworthiness remains under pressure from the risk to economic stability from high inflation, and from still-unresolved problems in the banking system," says Andrew Colquhoun, Head of Asia-Pacific Sovereigns at Fitch.

Mr. Sticking Colquhoun said that a policy-tightening package agreed in February would support the ratings, but slippage could see negative pressure build-up.

According to Fitch, inflation hit 22.2% in July, up from 11.8% in December, partly on high food prices but also from strong money and credit growth and fiscal spending in 2010.

Fitch views the Resolution 11 agenda as a support to domestic confidence in the dong, economic stability and the sovereign ratings. The currency has been broadly stable since February against the US dollar.

Fitch also recommended the necessary to continue official commitment to the plan./.