Vietnamese government bonds rallied for an eighth day as the central bank cut benchmark interest rates for a fourth month. The dong was little changed.
The five-year yield dropped to the lowest level in almost three years as the State Bank of Vietnam cut its repurchase rate for daily open-market operations to 10 percent from 11 percent today, according to an e-mailed statement. Last week, it announced cuts of one percentage point to its refinancing, discount and dong-deposit rates, effective today, according to its website.
“With inflationary pressures expected to ease further and lower oil prices, we expect the State Bank of Vietnam to cut rates by a further 200 basis points in the coming months,” Trinh D. Nguyen, a Hong Kong-based economist at HSBC Holdings Plc, wrote in a research note released today.
The yield on the benchmark five-year bonds dropped one basis point, or 0.01 percentage point, to 9.45 percent, the lowest level since June 30, 2009, according to a daily fixing from banks compiled by Bloomberg.
The dong traded at 20,990 per dollar as of 3:59 p.m. in Hanoi, compared with 20,998 on June 8, 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 fixing.