Vietnam's five-year bonds gained the most this month, pushing yields to the lowest level since June, after inflation slowed for the first time in more than a year. The dong was steady.
Consumer prices rose 22.42 percent in September from a year earlier, slower than the 23.02 percent gain in August, according to data released by the General Statistics Office in Hanoi on Sept. 24. That's the first deceleration since August 2010. The State Bank of Vietnam has raised its benchmark repurchase rate by a net 4 percentage points this year to 14 percent to contain price increases.
"There has been more demand for bonds from foreign investors," said Tong Minh Tuan, deputy head of research at Hanoi-based BIDV Securities Co., a unit of Bank for Investment & Development of Vietnam. "They may have observed the government's determination to tame inflation."
The yield on the benchmark five-year note declined five basis points, or 0.05 percentage point, to 12.42 percent, the lowest level since June 29, according to a daily fixing from banks compiled by Bloomberg.
The dong was unchanged at 20,807 per dollar as of 3:25 p.m. in Hanoi, according to data compiled by Bloomberg. The central bank fixed the reference rate at 20,628 today, unchanged since Aug. 24, according to its website. The currency is allowed to trade up to 1 percent on either side of the rate.