The money market of Viet Nam : structure and challenges

• Main Authors: Do, Hoai Phuong, Duong, Binh Duong, Phan, Pham Thuy Duong
• Other Authors: Gunter Dufey
• Format: Final Year Project
• Language: English
• Published: 2009
• Subjects: DRNTU::Business::Finance::Money::Money market; DRNTU::Social sciences::Economic development::Vietnam
• Online Access: http://hdl.handle.net/10356/15107
• Institution: Nanyang Technological University

In early 2008, Viet Nam capital market experienced a dramatic shrinkage and the country’s economic downturn started after the past 5 years of impressive GDP growth. The boom of Viet Nam stock market in 2006-2007 attracted both local and foreign investors’ enormous participation till the day the stock market bubble busted, and then the credit market is frozen. The firmness and efficiency of the Viet Nam financial system are questioned, especially the money market, whose function is to ensure the effective supply and channeling of money and the liquidity for the financial market. To the best of our knowledge, there is no published research that took a broad view of the money market of Viet Nam in full scale. So as to answer the question raised earlier, this paper fully focused on the Viet Nam money market with the belief that challenges are huge and tough but there are means for the country to overcome and the thorough transformation of the financial market still waits. Our research made use of available secondary data and focused on the Viet Nam money market in the period 2000-2008. After obtaining comprehensive background information of money market1, we dedicated the first part of our research on analyzing the current condition of Vietnam money market. Then, a detailed analysis was performed on various factors that may exert effect on VNMM to answer the question “Why is Vietnam money market underdeveloped?”. After indentifying and analyzing the challenges, suggestions were provided for Viet Nam to overcome such obstacles. At this critical time, such detailed research can help enhance the knowledge of participants in the Vietnam money market and stress the importance of promoting the market.