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Vietnam bonds up, dong unchanged
Vietnam’s bonds Tuesday gained for a second day on speculation,banks will use rising cash surplus to buy government debt, while the dong held steady.
Deposits at banks have risen 10.6 percent since the end of 2007, while the central bank has capped loan growth at 30 percent this year. Commercial banks are using the idle funds to buy securities, said Le Duc Tho, head of the investment department at Vietnam Bank for Industry and Trade, the country’s fourth-biggest lender by assets.
“Many lenders are now using surplus cash to buy bonds as loan growth is still limited by the central bank,” said Tho.
The yield on the five-year notes fell 14 basis points to 15.89 percent, the lowest since May 30, according to a daily fixing price from 10 banks compiled by Bloomberg.
The State Treasury on Monday sold VND1.2 trillion (US$72.3 million) of two- and three-year bonds at a coupon of 15.5 percent, down from 16 percent at its last debt sale, according to the treasury.
The Vietnamese dong traded at 16,590 against the dollar as of 3:51 p.m. Tuesday in Hanoi, according to data compiled by Bloomberg.
Thanhnien
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