Bloomberg News

Vietnam’s Bond Yields Climb to One-Week High on Rate Increase

October 11, 2011

Oct. 11 (Bloomberg) -- Vietnam’s five-year bonds dropped for a second day, pushing the yields to the highest level in more than a week, after the central bank increased a benchmark interest rate for the first time since May. The dong fell.

The State Bank of Vietnam raised on Oct. 7 its refinancing rate to 15 percent from 14 percent with effect from yesterday to slow Asia’s fastest inflation. Consumer prices rose 22.4 percent last month from a year earlier, official data show.

“Yields on government bonds go up with interest rates,” said Luu Hai Yen, Hanoi-based fixed income analyst at Thang Long Securities Joint-Stock Co.

Yields on five-year government debt rose one basis point, or 0.01 percentage point, to 12.42 percent, the highest level since Sept. 29, according to a daily fixing from banks compiled by Bloomberg.

The dong dropped 0.1 percent to 20,868 per dollar as of 4:35 p.m. in Hanoi, according to data compiled by Bloomberg.

Vietnam’s central bank weakened the dong-dollar reference rate today for the fourth time this month, fixing it at 20,668 per dollar from 20,653 yesterday, according to its website. The currency is allowed to trade up to 1 percent on either side of the official rate.

--Nguyen Kieu Giang. Editor: Anil Varma

To contact Bloomberg News staff for this story: Nguyen Kieu Giang in Hanoi at giang1@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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