Vietnam 10-Year Bonds Gain Most Since May as Inflation Slows

Vietnam’s 10-year bonds rose the most since May, drawing funds after the nation’s inflation rate dropped below 20 percent for the first time in six months. The dong was steady.

Consumer prices rose 19.8 percent from a year earlier in November, after increasing 21.6 percent in October, according to a Nov. 24 report from the General Statistics Office. The trade deficit narrowed to $700 million last month from a revised $750 million in October, according to the statistics office.

“Demand for bonds may increase because the inflation rate has dropped and the dong has been stable,” said Nguyen Tan Thang, head of fixed-income research at Ho Chi Minh City Securities Corp. “Pressure on the exchange rate has eased thanks to a lower trade deficit and more remittances being sent back toward the end of the year.”

The yield on the government’s 10-year bonds fell 38 basis points, or 0.38 percentage point, to 12.5 percent, according to a daily fixing price from banks compiled by Bloomberg. That’s the biggest decline since May 13 and the lowest yield since October.

The dong traded at 21,011 per dollar as of 4:24 p.m. in Hanoi, from 21,016 at the end of last week, according to data compiled by Bloomberg. The central bank set the reference rate at 20,803, unchanged since Oct. 28, its website showed. The currency is allowed to trade up to 1 percent on either side of the official rate.

To contact Bloomberg News staff for this story: Diep Ngoc Pham in Hanoi at dpham5@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net