VN bonds drop most this year on cash-shortage speculation

Vietnam’s government bonds fell, pushing benchmark five-year yields up by the most this year, on speculation banks are short of cash after the week-long Lunar New Year, or Tet, holidays. The dong was steady.

“Banks often face with fund shortages after Tet, because demand for cash soars during the holiday,” said Do Hoang Quynh Trang, a fixed-income trader at Hanoi-based Ocean Commercial Joint-Stock Bank. “Not many banks have money to buy bonds now.”

The yield on the five-year note gained five basis points, or 0.05 percentage point, to 12.42 percent from Jan. 20, according to daily fixing prices from banks compiled by Bloomberg. That was the biggest increase since Dec. 23.

The dong was little changed at 20,890 per dollar from Jan. 20 as of 5:14 p.m. in Hanoi, according to data from banks compiled by Bloomberg. Vietnamese financial markets were closed from Jan. 23 to Jan. 27.

The central bank set the reference rate at 20,828 per dollar, unchanged since Dec. 26, according to its website. The currency is allowed to fluctuate by as much as 1 percent on either side of that rate.

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