FTSE Russell Updates Vietnamese Dong Benchmark

FTSE Russell Updates Vietnamese Dong Benchmark as the firm announced a major enhancement to the methodology of VND VNIBOR, its long-standing Vietnamese interbank interest rate, with the changes taking effect from 3 November. The decision aims to bring the benchmark in closer alignment with the Financial Stability Board’s recommendations for reforming interest rate benchmarks. VND VNIBOR has a long-standing history as a trusted Vietnamese interbank interest rate, established more than 25 years ago, and the upcoming improvements reflect a step toward ensuring greater transparency and robustness. 

FTSE Russell Updates Vietnamese Dong Benchmark to align with global standards and strengthen Vietnam’s financial markets. He stated, “The goal is to ensure Vietnam has a more accurate and resilient interbank interest rate, one that will ultimately support the development of both the country’s financial markets and its broader economy.”

Following an extensive industry consultation process and the successful release of a prototype, FTSE Russell confirmed that overnight, spot-week, two-week, one-month, and three-month tenors will now be calculated using a methodology firmly based on VND deposit transactions. 

FTSE Russell Updates Vietnamese Dong Benchmark

Moreover, FTSE Russell will launch new overnight VND VNIBOR compounded average rates and an overnight index to facilitate the adoption of overnight VNIBOR as a risk-free rate. Consequently, Vietnam will move closer in line with other leading financial markets that already use risk-free rates, such as the United States with SOFR and Singapore with SORA. 

This development highlights Vietnam’s commitment to modernizing its financial infrastructure. Additionally, administration of the new methodology for overnight, spot-week, two-week, one-month, and three-month tenors, along with the compounded averages and the index, will transition to FTSE International Limited. FTSE Russell will administer these benchmarks in compliance with UK and EU BMR regulations, further ensuring international best practices.

However, the remaining two-month, six-month, nine-month, and twelve-month tenors will continue to rely on quote data, though their calculation will shift to a mid-rate sampled over a longer period to better align with trade-based tenors. Alongside VND VNIBOR, FTSE Russell also publishes USD VNIBOR and the VNDFIX Reference Rate, reinforcing its commitment to providing reliable and globally recognized financial benchmarks for Vietnam.

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