Vietnam’s Bonds Decline to Two-Month Low on Inflation Outlook

Vietnam’s government bonds fell, pushing the five-year yield to the highest level in almost two months, on concern inflation will quicken. The dong was steady.

Consumer prices will probably increase 5.75 percent in September from a year earlier, Saigon Securities wrote in a research note today. Inflation was 5.04 percent in August, official data show, and the full-year rate will be 6 percent, Prime Minister Nguyen Tan Dung said on Sept. 13.

“Prices in Vietnam will climb due to the impact of commodity prices in the international market,” said Hoang Nu Ngoc Thuy, an analyst at Bank for Investment & Development of Vietnam in Hanoi.

The yield on the five-year notes gained nine basis points, or 0.09 percentage point, to 9.96 percent, the highest level since July 19, according to a daily fixing from banks compiled by Bloomberg.

The dong traded at 20,855 per dollar as of 4:43 p.m. in Hanoi, compared with 20,850 on Sept. 14, according to data compiled by Bloomberg. The State Bank of Vietnam set the currency’s reference rate at 20,828, unchanged since Dec. 26, according to its website. The dong is allowed to trade as much as 1 percent on either side of the rate.