Vietnam’s bonds dropped for a fifth day on speculation banks will focus on boosting lending to meet the central bank’s annual target amid urgings from policy makers. The dong gained.
Governor Nguyen Van Binh ordered banks on July 7 to “be determined and quick in reducing lending rates to help companies.” Credit expanded 0.76 percent this year as of June 30, short of the targeted 14 percent to 15 percent for the full year and 8 percent to 10 percent for the second half, the State Bank of Vietnam said in a July 7 statement.
“The bond market has been quiet, partially due to slow credit growth,” said Tran Kieu Hung, a Hanoi-based fixed-income trader at Bank for Investment & Development of Vietnam. “Banks will try to give out more loans to meet the target.”
The yield on benchmark five-year notes rose two basis points, or 0.02 percentage point, to 9.83 percent in Hanoi, according to a daily fixing from banks compiled by Bloomberg.
The dong appreciated 0.1 percent to 20,870 per dollar as of 3:50 p.m. in Hanoi, according to data compiled by Bloomberg. The central bank set the daily reference rate at 20,828, unchanged since December 26, its website showed. The currency is allowed to trade up to 1 percent on either side of the rate.