March 23 (Bloomberg) -- Vietnam’s five-year bonds rose, pushing the yield to the lowest level in almost 14 months, after the central bank asked some local lenders to cut borrowing costs. The dong weakened.
The Joint-Stock Bank for Foreign Trade of Vietnam, the country’s biggest by market value, was among five banks told to cut operating costs and lower lending rates, according to a statement posted on the State Bank of Vietnam’s website yesterday.
“The move sent a signal about the central bank’s determination to bring down borrowing costs under the government’s request,” said Cao Tan Phat, a Ho Chi Minh City-based analyst at ACB Securities Inc. “Yields dropped as investors expect the lending rates will be cut very soon.”
The yield on five-year notes fell five basis points, or 0.05 percentage point, today and this week to 11.44 percent as of 2:34 p.m. in Hanoi, according to a daily fixing from banks compiled by Bloomberg. That was the lowest level since January 2011.
The dong dropped 0.1 percent today and 0.3 percent this week to 20,885 per dollar, according to data compiled by Bloomberg.
The central bank set the 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 rate.
To contact Bloomberg News staff for this story: Nguyen Kieu Giang in Hanoi at firstname.lastname@example.org
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