FTSE Russell has announced updates to the methodology of its Vietnamese Dong (VND) interbank interest rate benchmark, VND VNIBOR, effective from 3 November. The revisions aim to align the benchmark more closely with Financial Stability Board recommendations for reforming interest rate benchmarks, ensuring a robust and transparent framework for Vietnam’s financial markets.

VND VNIBOR, with a history spanning more than 25 years, serves as a key reference for the Vietnamese banking system and broader financial sector. Jacob Rank-Broadley, Head of LIBOR Transition at FTSE Russell, highlighted the significance of the update:

“These methodology changes have been developed in conjunction with the market to ensure Vietnam has an accurate and robust interbank interest rate which will support development of Vietnam’s financial markets and economy.”

FTSE Russell Updates VND VNIBOR to Reflect Transactions

Following extensive industry consultation and the successful publication of a prototype, FTSE Russell will calculate overnight, spot-week, two-week, one-month, and three-month tenors using a new methodology based on VND deposit transactions. This approach aims to enhance resilience and reliability, reflecting actual market activity.

In a move to support risk-free rate adoption, FTSE Russell will also launch new overnight VND VNIBOR compounded average rates and an overnight index. This aligns Vietnam with other leading financial markets such as the United States and Singapore, which use SOFR and SORA as risk-free benchmarks.

Administration of all updated tenors, compounded averages, and the new index will transition to FTSE International Limited, adhering to UK and EU Benchmark Regulation (BMR) standards. Meanwhile, the two-month, six-month, nine-month, and twelve-month tenors will continue to rely on quote data, with methodology adjustments moving to a mid-rate sampled over an extended period to better reflect trade-based activity.

FTSE Russell also continues to publish the USD VNIBOR and VNDFIX reference rates, providing market participants with a comprehensive set of tools for managing interest rate risk and supporting financial market development in Vietnam.

These updates mark a major step toward modernizing Vietnam’s benchmark interest rates and reinforcing market confidence.

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