UPSC Prelims Practice Questions — Vietnam economy is booming but foreign cash is fleeing from markets

Q1. Which one of the following authorities phased out the 'pre-funding' requirement for foreign institutional investors in Viet Nam in late 2024, a reform that was central to the country's recent FTSE Russell market reclassification?

  • A. State Bank of Vietnam
  • B. State Securities Commission of Vietnam
  • C. Ministry of Finance of Vietnam
  • D. Hanoi Stock Exchange Supervisory Board

Q2. Consider the following countries currently placed by FTSE Russell in its 'Secondary Emerging' market classification (as on the date of Viet Nam's reclassification confirmation in April 2026): 1. China 2. India 3. Indonesia 4. Thailand Which of the above is/are NOT correctly identified as 'Secondary Emerging' markets under the FTSE Russell framework?

  1. China
  2. India
  3. Indonesia
  4. Thailand
  • A. 1 and 3
  • B. 2 only
  • C. 4 only
  • D. 3 and 4

Q3. In the context of Viet Nam's recent stock-market reforms, the term 'pre-funding requirement' most accurately refers to which of the following?

  • A. A regulatory obligation on foreign institutional investors to deposit the full purchase value of a trade in cash before the buy order is placed
  • B. A minimum sovereign-wealth-fund corpus that emerging-market candidates must demonstrate before an index upgrade
  • C. A foreign-currency reserve buffer that the State Bank of Vietnam must hold against portfolio inflows
  • D. A mandatory lock-in period during which foreign investors cannot repatriate IPO subscription proceeds

Q4. As per the FTSE Russell announcement (April 2026), in how many phases will Viet Nam be included in the FTSE 'Secondary Emerging' market indices between September 2026 and September 2027?

  • A. Two phases
  • B. Three phases
  • C. Four phases
  • D. Six phases

Q5. Viet Nam's 2026 upgrade from 'Frontier' to 'Secondary Emerging' market was announced under the country-classification framework of which of the following institutions?

  • A. MSCI Inc.
  • B. S&P Dow Jones Indices
  • C. FTSE Russell
  • D. J.P. Morgan Emerging Markets Bond Index Committee
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