Vietnam Bonds Rise on Central Bank’s Cash Injection; Dong Falls

Vietnam’s five-year bonds advanced on speculation cash added to the financial system by the central bank provided lenders with more funds to purchase government debt. The dong fell.

The State Bank of Vietnam added a net 17.6 trillion dong ($836 million) this month through yesterday via open-market operations, compared with 12.6 trillion dong for the whole of November, according to Nguyen Duy Phong, a Ho Chi Minh City-based analyst at Viet Capital Securities.

“The secondary market has been quite active as demand for bonds has improved because banks have more cash,” Phong said.

Yields on five-year government debt fell eight basis points, or 0.08 percentage point, to 12.47 percent, according to a daily fixing from banks compiled by Bloomberg.

The dong dropped 0.1 percent to 21,043 per dollar as of 3:07 p.m. in Hanoi, according to data compiled by Bloomberg. The central bank set the reference rate at 20,813, unchanged since Dec. 14, its website showed. The currency is allowed to trade up to 1 percent on either side of the official rate.

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