HANOI, Sept 3 Vietnam bonds fell on Tuesday,
with yields reaching their highest in more than four months as
investors were hesitant about a sharp rise in interbank rates
and increasing inflation, analysts said.
Yields on government bonds on two-year terms
increased 0.04 point to 7.44 percent, the highest since April
23, according to Reuters fixings data.
One-year bond yields rose 0.069 point to 6.75
percent, passing a May 13 peak. Five-year bond yields
were at 8.425 percent, the highest since May 14.
Vietnam's inflation was nearly flat between March and July
but edged up 0.83 percent in August from the previous month, the
government said in a weekend report.
Investors expect inflation would rise further in September
as prices of healthcare and education services were climbing,
said Nguyen Duy Phong, an analyst at VietCapital Securities.
The overnight interbank rate increased to 3.57 percent on
Tuesday from 2.23 percent on the last trading day on Friday,
according to Reuters data. Markets were closed on
Monday for a public holiday.
"Local media reported some banks had raised their deposit
rates on concern about a high inflation level. The increase in
interbank rate pushed bond yields up in the short-term," Phong
The State Treasury and banks last week auctioned 10 trillion
dong ($473 billion) worth of bonds but sold only 18 percent of
that, or 1.775 trillion dong.
(Compiled by Nguyen Phuong Linh; Editing by Martin Petty)