The State Bank of Vietnam lowered its refinancing rate to 12 percent from 13 percent with effect from today, according to a May 25 statement on its website. It reduced the so-called repurchase and discount rates by one percentage point to 11 percent and 10 percent, respectively. The inflation rate dropped to a 21-month low of 8.34 percent in May.
“Most of the macroeconomic indicators are indicating that Vietnam’s economy is on its way to stabilization, which supports bond-price appreciation,” Le Nguyet Anh, research manager at Ho Chi Minh City-based ACB Securities Co., wrote in a note today. A further easing of inflation next month may allow policy makers to cut rates again, she wrote.
The yield on one-year government notes fell one basis point, or 0.01 percentage point, to 8.84 percent, the lowest level in a week, according to a daily fixing from banks compiled by Bloomberg. The yield on five-year bonds was little changed at 9.68 percent.
The dong rose 0.2 percent to 20,827 per dollar as of 1:45 p.m. in Hanoi, according to data compiled by Bloomberg. The central bank fixed the reference rate at 20,828 today, according to its website. The currency is allowed to trade as much as 1 percent on either side of the rate.
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