Vietnam bonds are little changed on inflation concerns

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Vietnam's benchmark five-year bonds were little changed after dropping the most in more than two months yesterday on concern inflation may rise this month following the country's biggest holiday. The dong was unchanged.

The yield on the notes was little changed at 11.541 percent, from 11.539 percent Tuesday, according to a daily fixing price from banks compiled by Bloomberg. The yield surged 11 basis points Tuesday, the most since Nov. 24. A basis point is 0.01 percentage point.

"Although the bond yield was little changed today, it is still on the upward trend because inflation is expected to keep raising this month since Tet pushed up demand for commodities," said Vu Anh Duc, an analyst at Vietnam Joint Stock Commercial Bank for Industry and Trade. Vietnam celebrated the Lunar New Year, known locally as Tet from Jan. 31 to Feb. 7.

The inflation rate reached 12.17 percent last month, the highest since February 2009, according to figures released by the General Statistics Office in Hanoi. Consumer prices rose 1.74 percent in January from the previous month.

The dong remained unchanged at 19,498 per dollar as of 3:11 p.m. in Hanoi, unchanged from Tuesday, according to data compiled by Bloomberg.

The State Bank of Vietnam set the daily reference rate at 18,932 dong, a level unchanged since Aug. 18. The currency is allowed to fluctuate as much as 3 percent on either side of that rate.

The dong traded between 21,250 and 21,330 per dollar this afternoon at money changers in Hanoi, from 21,150 and 21,400 Tuesday, according to a telephone-information service run by the state-owned Vietnam Posts & Telecommunications.

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