VIETNAM - Bonds Drop as Banks Scale Back Purchases; Dong Steady

by lexie Wed Jan 04, 2012 10:10 am

January 4, 2012

Bonds Drop as Banks Scale Back Purchases; Dong Steady

Vietnam’s government bonds dropped on speculation banks scaled back debt purchases as they hoarded cash to meet customer withdrawals ahead of the Chinese New Year Holiday starting Jan. 23. The dong was stable.

“Many banks have halted bond purchases in anticipation of increased cash demand ahead of the Lunar New Year holiday,” said Do Hoang Quynh Trang, a fixed-income trader at Hanoi-based Ocean Commercial Joint-Stock Bank.

The yield on the three-year note climbed three basis points, or 0.03 percentage point, to 12.51 percent, according to daily fixing prices from banks compiled by Bloomberg. Two-year yields rose for a second day, adding five basis points to 12.58 percent.

The dong traded 21,030 per dollar, unchanged from yesterday, according to data from banks compiled by Bloomberg. The central bank set the reference rate at 20,828 per dollar, unchanged since Dec. 26, according to its website. The currency is allowed to fluctuate by as much as 1 percent on either side of that rate. (Bloomberg)

http://www.vietfinancenews.com/2012/01/bonds-drop-as-banks-scale-back.html#more