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Bonds slide to three-week low
The government bonds declined, sending the yield on benchmark five-year notes to the highest level in almost three weeks, on concern a pickup in lending will fuel inflation.
The dong strengthened the most in two months after banks cut interest rates for US dollar deposits.
Vietnam should phase out subsidies to bank lending as “rapid” credit growth threatens to stoke inflation, the World Bank said in a report Monday.
Total outstanding banking loans increased 15 percent through mid-May from December, Deputy Prime Minister Nguyen Sinh Hung told the National Assembly last month.
Consumer prices rose 5.6 percent from a year earlier in May, the smallest increase since 2004, official figures show.
“Investors may have sold more of their fixed-income assets because returns will drop if inflation quickens,” said Nghiem Ngoc Minh, Hanoi-based head of The Capital-Management Department at Bank for Agriculture & Rural Development, Vietnam’s biggest bank by assets.
The yield on the government’s five-year note rose 12 basis points, or 0.12 percentage point, to 9.27 percent, the highest since May 19, according to prices from banks compiled by Bloomberg.
thanhnien, bloomberg
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