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Government bond rates continue to fall

Update: May, 24/2013 - 11:00

HA NOI (VNS)— The yield on Government two-year bonds declined 33 points to reach a record low of 6.8 per cent on Tuesday, Ha Noi Stock Exchange announced. Yields on other bonds also had significant falls.

Specifically, three-year and five-year bond yields reduced by 27 and 21 points to 7.23 per cent and 8.23 per cent.

Bonds worth a total of VND5 trillion (US$238 million) found buyers on Tuesday.

Meanwhile, the yield on 28-day term treasury bills (T-bills) on Tuesday continued to decrease 20 points to 2.5 per cent a year. This follows a fall of 2.7 per cent a day earlier.

The State Bank of Viet Nam sold VND10 trillion ($476.1 million) of T-bills in only two days.

It was the first issuance of 28-day T-bills after two months of interruption. On Monday, the coupon rate of 52-week T-bills dropped 47 basis points to 6.03 per cent.

A banking official told website that interest rates remained on a downward trend due to the central bank's recent operational policies.

In addition, another two major factors affected rates. First, the volume of bonds and T-bills maturing in the last two weeks of this month amounted to more than VND38 trillion ($1.8 billion), creating a cash surplus, which forced credit institutions to reinvest.

Second, Vietinbank (CTG) has collected nearly $750 million from the sale of its shares (more than 644 million units) to the Japanese Bank of Tokyo Mitsubishi UFJ Ltd. — VNS

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