Vietnam’s Bonds Advance on Falling Interbank Rates; Dong Steady
The overnight interbank deposit rate fell 18 basis points to 3.98 percent today, the most in two weeks, extending its drop this year to 7.83 percentage points. Money supply in the banking system is still abundant, bringing interbank rates to lower levels, Bank for Investment & Development of Vietnam analysts including Hanoi-based Hoang Nu Ngoc Thuy and Nguyen Thu Linh, wrote in a research note today.
“Demand for government bonds is forecast to increase strongly because interbank rates are likely to drop” this week, they wrote. “Foreign investors will continue to participate in the secondary market.”
The yield on the benchmark notes fell six basis points, or 0.06 percentage point, to 9.89 percent, the lowest level since July 12, according to a daily fixing from banks compiled by Bloomberg.
The dong was unchanged at 20,850 per dollar as of 2:55 p.m. in Hanoi, according to data compiled by Bloomberg. The State Bank of Vietnam set the currency’s reference rate at 20,828, unchanged since Dec. 26, according to its website. The dong is allowed to trade as much as 1 percent on either side of the rate.
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