Vietnam’s government bonds fall on cash supply; dong advances

Vietnam’s five-year bonds fell on speculation a shortage of cash at local banks will curb demand for the securities. The dong gained.
“Demand for government bonds is relatively low these days because banks have to set aside funds for business payments during the year-end period,” said Luu Hong Hue, deputy manager of treasury and bonds at Agribank Securities Joint-Stock Co., the country’s second-biggest bond brokerage.
The yield on the five-year note climbed one basis point to 11.21 percent, according to a daily fixing price from banks compiled by Bloomberg. It reached a one-year high of 11.29 percent on Nov. 19. A basis point is 0.01 percentage point.

Hue expects yields to rise further from now to the end of the year. Vietnamese banks have raised interest rates on dong deposits by about 0.5 percentage point to as high as 10 percent over the past week to help attract funds, Vietnam News newspaper reported on Nov. 17. The State Bank of Vietnam earlier said that it may intervene should rates exceed 10 percent, according to the paper.
Vietnam’s currency gained 0.06 percent to 17,864 per dollar as of 3:30 p.m. in Hanoi Monday, according to data compiled by Bloomberg. The currency traded at 19,800 Monday at money changers in Ho Chi Minh City in the so-called black market, compared with 19,510 late last week, according to a telephone information service run by state-owned Vietnam Posts & Telecommunications.
The central bank set the reference rate at 17,027 Monday from 17,025 Nov. 20, according to its Web site. The currency is allowed to trade up to 5 percent on either side of the official rate.

Source: thanhniennews.com