Posts Tagged ‘Basis point’

The Federal Reserve may keep interest rates at record lows for the longest period since World War II as the economic slowdown that sparked a four-month bond rally worsens, according to Treasury market signals.

The 3-percentage-point gap between yields for three-month and 10-year Treasuries indicates the economy may grow 1.1 percent in the 12 months ending June 2012, a study by the Fed Bank of Cleveland says. That’s less than half the central bank’s current forecast, and may delay any rate increase from the zero- to-25 basis point range held since December 2008.

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Advertisements – Vietnam’s dong weakened on speculation last week’s cut in borrowing costs could fuel inflation and reduce investor confidence.

The State Bank of Vietnam dropped its benchmark interest rate by one percentage point on July 4, even after year-on-year inflation reached 20.8 percent in June, the highest among 17 Asian economies tracked by Bloomberg.


The lira strengthened against the dollar, extending this week’s advance, as Greece moved closer to avoiding default.

The lira appreciated 0.2 percent to 1.6200 per dollar at 11:24 a.m. in Istanbul, extending this week’s gain to 1 percent. Two-year benchmark bonds rose, with yields falling two basis points, or 0.02 percentage point, to 9.16 percent, data compiled by Bloomberg showed.

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Vietnam’s government bonds fell this week, pushing the yield on benchmark five-year notes to a nine- month high, as concern inflation will gather pace curbed demand for fixed-income assets. The dong strengthened.

The yield on five-year notes climbed five basis points to 11.63 percent, the highest level since June 7, according to a daily fixing from banks compiled by Bloomberg. The rate was 11.53 percent yesterday. A basis point is 0.01 percentage point.

Prime Minister Nguyen Tan Dung said March 2 that fighting inflation was now the “top priority.” The State Bank of Vietnam lifted its seven-day reverse repurchase rate, or what it charges commercial banks in daily open-market operations, to 12 percent from 11 percent on Feb. 22. The government raised domestic fuel prices by as much as 24 percent in February, when inflation hit a two-year high of 12.3 percent, and electricity tariffs increased more than 15 percent this month.