Moody's cuts Vietnam view to negative

Moody's Investors Service said it changed to negative from positive the outlook on Vietnam's key ratings owing to policy shortcomings in addressing inflationary and balance-of-payments pressures.

The changed outlooks are for the Ba3 long-term government foreign- and local-currency ratings and the B1 foreign-currency bank deposit ceiling.

The economic imbalances now emerging are greater than anticipated, which derails improving trend previously evident in the country's credit fundamentals, Moody's said. Rising inflation also is proving difficult to control, the agency said, and pressures have built up on the balance of payments.

The dilemma now is how to dampen growth without throwing the economy into recession, Moody's said.

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