Vietnam’s five-year bonds rose for a fourth week on speculation a slowdown in lending will prompt banks to invest more in government debt. The dong was steady.
Credit may grow between 6 percent and 8 percent this year, Thoi Bao Kinh Te Saigon newspaper reported yesterday, citing an unpublished central bank forecast. The nation has a target for an increase of 14 percent to 15 percent in loans, Vu Duc Dam, chairman of the government office said on July 3. The overnight interbank deposit rate fell to a two-month low of 1.27 percent today, according to data from banks compiled by Bloomberg.
“Banks want to buy bonds as funds are still abundant, borrowing costs are low, and credit is not expanding much,” said Hoang Thanh Tam, head of the fixed-income department at Vietnam Maritime Commercial Joint-Stock Bank in Hanoi.
The five-year yield declined eight basis points, or 0.08 percentage point, this week to 9.65 percent, the lowest level since June 18, according to a daily fixing rate from banks compiled by Bloomberg. It dropped two basis points today.
The dong traded at 20,853 per dollar as of 2:58 p.m. in Hanoi, little changed from 20,858 at the end of last week, according to data compiled by Bloomberg. The central bank set its reference rate at 20,828, unchanged since Dec. 26, according to its website. The currency is allowed to trade as much as 1 percent on either side of the fixing.
To contact Bloomberg News staff for this story: Diep Ngoc Pham in Hanoi at firstname.lastname@example.org
To contact the editor responsible for this story: James Regan at email@example.com