Vietnam two-year bonds rise after yield declines at debt auction

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Vietnam's two-year bonds rose the most in a week, pushing the yield to a four-month low, after the government's borrowing costs declined at a debt auction. The dong was steady.

The State Treasury sold VND1 trillion ($48 million) of two-year notes at 9.00 percent yesterday, according to the Hanoi Stock Exchange's website. That compares with 9.15 percent at the previous sale on Nov. 21.

"The fall in yields indicates that demand for government bonds is still high," said Nguyen Duy Phong, a Ho Chi Minh City-based analyst at Viet Capital Securities.

The yield on the two-year bonds dropped nine basis points, or 0.09 percentage point, to 9.10 percent, according to a daily fixing rate from banks compiled by Bloomberg. That's the lowest level since Aug. 6. The yield on benchmark five-year bonds fell two basis points to 9.83 percent.

The dong traded at 20,850 per dollar as of 1:46 p.m. Thursday in Hanoi, compared with 20,848 on Wednesday, according to data compiled by Bloomberg.

The State Bank of Vietnam set its reference rate at 20,828, unchanged since Dec. 26, according to its website. The currency is allowed to trade up to 1 percent on either side of the rate.

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