Vietnam bonds rise on bank liquidity; dong is little changed

Vietnam’s five-year bonds advanced, pushing the yield to the lowest level in a week, on speculation banks will have more cash available to purchase the securities. The dong was little changed.


A liquidity shortage at banks eased after the central bank injected between VND5 trillion ($270.6 million) and VND6 trillion a day into the money market, Dau Tu Tai Chinh newspaper reported, citing Nguyen Ngoc Bao, director of monetary policy at the central bank. Interest rates in the interbank market dropped between 0.07 and 2.23 percentage points, the paper said.

“Local banks have started purchasing bonds, pushing demand up for the securities,” said Tran Kieu Hung, a Hanoi-based trader at Bank for Investment & Development of Vietnam, known as BIDV.

The yield on the benchmark five-year notes fell 12 basis points to 12.29 percent, the lowest level since Jan. 11, according to data from banks compiled by Bloomberg.

The dong was at 18,479 per dollar as of 3:21 p.m. in Hanoi Monday from 18,474 on Jan. 15, according to data compiled by Bloomberg. It reached a record-low 18,500 on Nov. 26.

The currency fetched between 19,280 and 19,330 at money changers in Ho Chi Minh City today, versus 19,240 and 19,280 on Jan. 15, according to a telephone directory information service, known as 1080, run by state-owned Vietnam Posts & Telecommunications.

The State Bank of Vietnam has kept its daily reference rate for the dong at 17,941 since Dec. 10, according to its website. The currency is allowed to fluctuate by as much as 3 percent on either side of that rate.

Source: Bloomberg