Vietnam bonds gain on speculation of purchases by banks

Vietnam’s two-year government bonds rose the most in a week on speculation banks have more cash to invest in debt securities.

The dong was stable.

Cash availability among lenders has “significantly improved” as the State Bank of Vietnam’s purchases of foreign currencies since the start of 2012 injected dong into the financial system, Governor Nguyen Van Binh told reporters yesterday.

“Banks have extra cash but couldn’t lend much” as the central bank is limiting lenders’ credit growth at 17% this year to slow inflation, according Nguyen Duc Hai, Ho Chi Minh City- based portfolio manager at Manulife Asset Management. “They buy more bonds then.”

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