April 24 (Bloomberg) -- Vietnam’s benchmark five-year bonds gained for a seventh day, the longest streak since June 2010, on speculation banks bought debt as a slowdown in commercial lending boosted cash in the system. The dong strengthened
Commercial lending fell 1 percent in the first quarter from a year earlier, swelling funds in the financial system, according to an April 13 posting on the government’s website. Vietnam may be forced to cut its 2012 economic growth target to as low as 5 percent from 6 percent, two government advisers told Bloomberg News today.
“Bank liquidity is quite abundant and they are finding it hard to extend loans to the private sector because of expectations of slower growth,” said Nguyen Duc Hai, Ho Chi Minh City-based portfolio manager at Manulife Asset Management.
Five-year bond yields fell one basis point, or 0.01 percentage point, to 10.85 percent, according to a daily fixing from banks compiled by Bloomberg.
The dong rose 0.4 percent to 20,765 per dollar as of 4:47 p.m. in Hanoi, according to data compiled by Bloomberg. The State Bank of Vietnam set its reference rate at 20,828, unchanged since Dec. 26, according to its website. The currency is allowed to trade up to 1 percent on either side of the rate.
To contact the reporter on this story: Nick Heath in Hanoi at firstname.lastname@example.org
To contact the editor responsible for this story: Sandy Hendry at email@example.com