Vietnam’s sovereign bonds fell, pushing the five-year yield to the highest in almost two months, as interbank interest rates surged.
The yield on the debt due 2019 rose 18 basis points to 5.68 percent, the highest level since Sept. 19, according to a daily fixing from lenders compiled by Bloomberg. The yield has advanced 51 basis points, or 0.51 percentage point, this month.
The overnight interbank rate gained 28 basis points to 3.53 percent Monday following an increase of 1.5 percentage points last week. The rate, at the highest level since August, typically rises in the middle of the month when there is more lending.
Higher interbank rates “had a negative impact on the primary and secondary bond market,” Saigon Securities analysts including Hanoi-based Pham Luu Hung wrote in a report Monday. Yields in the secondary market increased in line with increases at government auctions, they wrote.
The State Treasury sold VND800 billion (US$37.5 million) of five-year bonds and VND200 billion of 10-year debt on Nov. 13 at 5.3 percent and 6.45 percent, respectively, according to statement on Hanoi Stock Exchange website. That compares with 5.1 percent and 6.4 percent at the previous sale on Nov. 6. The 10-year sovereign yield rose 26 basis points to 6.88 percent in the secondary market Monday.
The dong fell 0.1 percent to 21,350 per dollar, data compiled by Bloomberg show. The central bank fixed the currency’s reference rate at 21,246 Monday, where it’s been since June 19, according to its website. The dong is allowed to trade as much as 1 percent on either side of the rate.