Jan. 4 (Bloomberg) -- Vietnam’s three-year bonds rose, pushing the yield to the lowest level since June, on speculation demand from banks will increase before next month’s Lunar New Year holiday. The dong was steady.
Credit growth may still be slow in the first few months of 2013, Prime Minister Nguyen Tan Dung said in his New Year’s message posted on the government’s website Jan. 1. The central bank lowered the interest-rate cap on dong deposits for terms of one to 12 months to 8 percent from 9 percent in December, along with cuts to the refinance, discount and repurchase rates. The weeklong Lunar New Year holiday, known as Tet, starts Feb. 10.
The yield on the three-year bonds fell eight basis points to 9.15 percent, the lowest since June 11, according to a daily fixing rate from banks compiled by Bloomberg. The yield dropped 10 basis points, or 0.1 percentage point, this week.
“Bond yields are still attractive as they’re higher than the deposit rate cap,” said Nguyen Duy Phong, a Ho Chi Minh City-based analyst at Viet Capital Securities Co. “Tet is approaching so banks won’t be lending much.”
The dong traded at 20,843 per dollar as of 4:16 p.m. in Hanoi, the same as yesterday, according to data compiled by Bloomberg. It was little changed for the week. The State Bank of Vietnam set its reference rate at 20,828, unchanged since Dec. 26, 2011, according to its website. The currency is allowed to trade as much as 1 percent on either side of the rate.
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