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SBV issues currency regulations
Organisations and individuals residing in Viet Nam will be required to have corresponding foreign currency capital if they want access to foreign currency loans, according to a new circular.
The Circular No.7 issued by the State Bank of Viet Nam (SBV) on last Friday (March 25) and will take effect on May 6.
According to the SBV, this circular follows up on the Government's Resolution No.11/NQ-CP on measures to curb inflation, stabilise the macro-economy and ensure social welfare to ensure that the government's new policy is implemented effectively.
Under the new circular, credit institutions will be allowed to provide foreign-currency loans of short-, medium- and long-term for individuals and organisations that need to pay for their imports of commodities and services.
However, in order to qualify, they must have a similar amount of foreign currency raised from their trading and production activities. They can also buy or borrow from other credit organisations. If they do so, they must provide proof and a commitment in writing.
Credit organisations will also be able to provide short-term foreign currency loans for individuals and organisations to carry out their projects involved in trading and production of commodities exported via Viet Nam's border gates.
However, borrowers must prove to have enough foreign currency that will be raised from their export business to pay the debt.
Individuals and organisations that want to get foreign-currency loans for their domestic trading and production activities will be required to sell the amount of the borrowed foreign currency to their lenders in accordance with the form of foreign-exchange spot trading.
Any foreign currency lending cases that do not adhere to these regulations must be approved by the SBV Governor in writing.
The new policy also notes that individuals and organisations that apply Viet Nam's Resident Law can benefit from these new foreign currency lending regulations.
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