Vietnam needs benchmark to kick-start onshore rates market

Government needs to establish local rates standard otherwise moves to establish a domestic derivative sector could be stymied, say global banks

The lack of an open and transparent interest rate index for benchmarking is a major barrier to Vietnam's plans to create a domestic derivatives market, according to global players active in the local market.

In March this year, the Vietnamese government announced plans – known as 366/QD-TTg – to overhaul the country's legal framework in order to develop the nascent local derivatives market.

The initiative has three phases. The basic legal framework and infrastructure will be built between 2014