hsbc-and-standard-chartered-pioneer-dong-swaps

HSBC and Standard Chartered pioneer dong swaps

Dong interest-rate swaps create new hedging opportunities for Vietnamese market participants.
Vietnamese banks and corporates are set to benefit from the opening of the interbank market for interest-rate swaps now that HSBC and Standard Chartered have completed the first such trade.

The $3 million trade is a five-year swap, with HSBC paying a floating rate at the three-month Vietnamese interbank offered rate in exchange for receiving a fixed dong rate from Standard Chartered.

Vietnam's central bank paved the way for interest-rate and cross-currency swaps with a blanket approval in December 2006, but this is the first trade to come to the market. Before the approval, such swaps were possible, but the central bank only issued approvals on a case-by-case basis.

The blanket approval should create a...
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