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Bonds jump most in three months, dong little changed
Vietnam’s five-year bonds Wednesday climbed the most since July as interest-rate cuts boosted the attraction of fixed-income securities. The dong was little changed.
Lending rates in Vietnam’s interbank market in October “declined strongly” to as low as 10.79 percent, the central bank said on its website late Tuesday. The State Bank of Vietnam lowered its benchmark interest rate Wednesday by a percentage point to 12 percent, adding to a similar sized cut that took effect on October 21.
“The reduction of interest rates will push the yield to lower levels and that will increase the demand for government debt,” said Phung Trung Kien, a Hanoi-based analyst at the securities unit of Vietnam Joint-Stock Commercial Bank for Private Enterprises, known as VPBank.
The yield on the five-year note fell 56 basis points to 14.73 percent, the lowest since May 27, according to a daily fixing price from 10 banks compiled by Bloomberg. One hundred basis points make up a percentage point.
The dong was little changed versus the US dollar. The currency traded at VND16,836.5 per dollar as of 4:30 p.m. in Hanoi, compared with VND16,836 late Tuesday, according to data compiled by Bloomberg.
The State Bank of Vietnam today fixed the reference rate at VND16,513, compared with VND16,512 Tuesday. The currency is allowed to trade by 2 percent on either side of the official rate.
Thanh Nien, Bloomberg
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