Bloomberg News

Vietnam Bonds Gain on Signs Cash Increased at Banks; Dong Steady

July 04, 2012

Vietnam’s three-year bonds rose for the first time in three days as the central bank lent funds at a lower rate at its daily money-market auction, signaling the amount of cash in the financial system increased. The dong was steady.

The State Bank of Vietnam’s repurchase rate declined to 8 percent at today’s auction from 8.5 percent on July 2, according to an e-mail from the monetary authority. The overnight interbank deposit rate fell 76 basis points to 4.71 percent today, declining for the first time this week, according to data from banks compiled by Bloomberg.

“Interest rates dropped at open-market operation auctions today as well as in the interbank market, showing that some banks have surplus cash,” said Hoang Thanh Tam, head of the fixed-income department at Vietnam Maritime Commercial Joint- Stock Bank in Hanoi. More cash may spur bond purchases, he said.

Three-year yields fell seven basis points, or 0.07 percentage point, to 9.66 percent, according to a daily fixing rate from banks compiled by Bloomberg.

The dong traded at 20,890 per dollar as of 4:30 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.

To contact Bloomberg News staff for this story: Nguyen Dieu Tu Uyen in Hanoi at uyen1@bloomberg.net

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


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