The International Monetary Fund is not very hopeful that Vietnam can make further interest rate cuts this year. "While headline inflation has come down, core inflation (excluding raw food and energy) remains high, limiting the room for rate cuts," it said in a release at the conclusion of a mission to Hanoi and Ho Chi Minh City from April 8 to 25 for the 2013 Article IV Consultation discussion with Vietnamese authorities. Consumer prices rose by 6.61 percent year-on-year in April. Prices have risen 2.41 percent so far this year. The State Bank of Vietnam made its only cuts this year in March when it lowered the refinance rate to 8 percent from 9 percent and the discount rate to 6 percent from 7 percent. But UK-based Standard Chartered Bank said in a recent report that the central bank "may take advantage" of still-benign inflation to go for a rate cut of 0.5 percent. The IMF's report said the "economy could be bottoming out, led by strong exports." Last quarter exports … [Read more...] about Inflation ‘limits room’ for Vietnam rate cuts: IMF
25 year refinance rates
Vietnam’s five-year bond yield declines to 2009 low on rate cut
Vietnam's bonds rose, driving the five-year yield to the lowest since February 2009, as slowing inflation allowed the central bank to cut interest rates to spur the economy. The dong was steady. The State Bank of Vietnam lowered the refinance rate to 8 percent from 9 percent and the discount rate to 6 percent from 7 percent, effective March 26, according to a statement on its website today. It also reduced a rate cap on dong deposits due in a month to less than a year to 7.5 percent from 8 percent. Inflation decelerated to 6.64 percent in March, the slowest pace since September 2012, according to figures released March 23 by Hanoi-based General Statistics Office. "Demand for government bonds is still energetic," Pham Luu Hung, associate director of institutional research and investment advisory at Saigon Securities Inc., wrote in a note today. "Lower bond yields reflected short-term inflation stabilization and lower deposit rates." The five-year yield fell eight basis points, or … [Read more...] about Vietnam’s five-year bond yield declines to 2009 low on rate cut
Vietnam to begin WTO import tariff cuts in the new year
Consumer products would be subject to the deepest and quickest import tax cuts, starting in the new year, the WTO negotiation mission told a meeting in Hanoi Monday. At the meeting, held to apprise businesses on the country's commitments under the WTO, Nguyen Thi Bich Hang, head of the finance ministry's Cooperation Department, said Vietnamese consumers would benefit greatly from the tariff reductions. The country would also gradually lower the average tax on all items to 13.4 percent within 5-7 years. … [Read more...] about Vietnam to begin WTO import tariff cuts in the new year
Interest rates set to rise after central bank’s surprise move
Interest rates are forecast to rise further after the government, in an unexpected move, raised three key rates on Friday. Local banks say they will have to raise interest rates after the central bank hiked key rates … [Read more...] about Interest rates set to rise after central bank’s surprise move
Vietnam bonds rise as falling money-market rate spurs demand
Vietnam’s benchmark five-year bonds on Friday rose for a third day, pushing the yield to the lowest in more than a week, on speculation falling money-market rates increased demand from lenders. The dong strengthened. The overnight interbank deposit rate fell 97 basis points to 4.41 percent on Friday, its lowest level in two weeks, according to data from banks compiled by Bloomberg. The measure has declined 199 basis points since June 26. A drop in the rates at which banks lend to each other makes returns from government debt relatively more attractive. “That’s a buying signal,” said Tran Kieu Hung, a Hanoi- based bond trader at Bank for Investment & Development of Vietnam. “Demand for bonds has increased.” The yield on five-year bonds fell four basis points, or 0.04 percentage point, to 9.73 percent, according to a daily fixing rate from banks compiled by Bloomberg. The yield dropped eight basis points this week, the first seven-day decline … [Read more...] about Vietnam bonds rise as falling money-market rate spurs demand