Bloomberg News

Vietnam 5-Year Bonds Gain as Interbank Rates Slide; Dong Weakens

June 06, 2012

Vietnam’s benchmark five-year bonds rose for a fifth day on speculation falling money-market rates are boosting demand for government debt. The dong weakened.

The overnight interbank deposit rate declined 15 basis points to 1.22 percent, the lowest level since June 2009 when Bloomberg started compiling the data. The measure, which was at 11.81 percent at the end of 2011, has fallen more than 300 basis points in the last month.

“Liquidity in the money market is good, supporting the trend lower,” said Tran Kieu Hung, a Hanoi-based fixed-income trader at Bank for Investment & Development of Vietnam.

Five-year bond yields fell two basis points, or 0.02 percentage point, to 9.53 percent, according to a daily fixing rate from banks compiled by Bloomberg. That’s the lowest since May 21.

The dong dropped 0.3 percent to 21,005 per dollar as of 2:11 p.m. in Hanoi, according to data compiled by Bloomberg. The State Bank of Vietnam set its reference rate at 20,828, unchanged since Dec. 26, according to its website. The currency is allowed to trade up to 1 percent on either side of the rate.

To contact the reporter on this story: Nick Heath in Hanoi at nheath2@bloomberg.net

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


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