Vietnam’s Bonds Gain on Cash Surplus at Banks; Dong Holds Steady
Vietnam’s bonds gained, pushing the five-year yield to the lowest level in three weeks, on speculation banks have more funds to buy debt as an economic slowdown saps demand for loans. The dong held steady.
The yield on the benchmark five-year notes fell four basis points, or 0.04 percentage point, to 9.80 percent in Hanoi, according to a daily fixing from banks compiled by Bloomberg. The overnight interbank deposit rate slid for the eighth day, falling 36 basis points to 1.47 percent, data from lenders show.
“Bond yields dropped in line with declines in interest rates in the interbank market,” said Nguyen Thi Ngoc Anh, head of fixed-income trading at Asia Commercial Bank in Ho Chi Minh City. Banks face difficulties in lending as slowing growth hurts companies, according to Anh.
The economy grew 4.66 percent in the three months to June from a year earlier, and Deputy Prime Minister Vu Van Ninh said last month full-year expansion may fall below the government’s 6 percent target.
The dong traded at 20,868 per dollar as of 4 p.m. in Hanoi, unchanged from yesterday, according to data compiled by Bloomberg. The central bank set its reference rate at 20,828, unchanged since Dec. 26, according to its website. The currency is allowed to trade as much as 1 percent on either side of the fixing.
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