The government aims to reduce commercial lending rates to about 15 percent, Lao Dong newspaper reported yesterday, citing the outcome of a meeting of the National Assembly’s Economic Commission. The rates are currently as high as 20 percent, according to data from the central bank. Vietnam’s central bank cut borrowing costs for the second time in a month on April 10.
“In the second half of this month, we expect the secondary market to continue to be active as small- and mid-size banks still have surplus cash to invest in bonds on expectations of lower yields,” according to a fixed-income report issued by Viet Capital Securities today. “High probability of further policy rate cuts by the central bank could drive demand higher for fixed-income instruments.”
The yield on three-year bonds fell six basis points, or 0.06 percentage point, to 9.01 percent, according to a daily fixing from banks compiled by Bloomberg. That’s the lowest level since June 2009.
The dong traded at 20,853 per dollar as of 4:32 p.m. in Hanoi, after closing yesterday at 20,850, according to data compiled by Bloomberg. The central bank set the currency’s reference rate at 20,828, unchanged since Dec. 26, its website showed. The currency is allowed to trade as much as 1 percent on either side of the official fixing.
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