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Vietnam’s bonds gain a fifth week on rates
Vietnam’s five-year bonds advanced for a fifth week after Prime Minister Nguyen Tan Dung Thursday signaled the central bank may further cut interest rates.
The State Bank of Vietnam cut its benchmark interest rate by a percentage point twice in the past month to help spur lending to companies.
It also lowered the amount of compulsory dong reserves that banks have to set aside to 10 percent of deposits from 11 percent, freeing up cash used to buy debt. Interest rates remain “high,” Dung told lawmakers.
The yield on the benchmark notes dropped 2.3 percentage points to 12.48 percent, according to a daily fixing price from 10 banks compiled by Bloomberg. A basis point is 0.01 percentage point. The yield dropped to 12.29 percent Friday, the lowest since May 15.
“Yields dropped sharply in the last couple of weeks in response to the rate cut,” Sacombank Securities Inc. said in its report released late Thursday. Trading in government debt rose 16 percent to VND6.86 trillion (US$404 million) last week from the final week of October, the report said.
Bloomberg
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