The State Bank of Vietnam (SBV) has issued regulations on restricting the use of foreign currencies in the country.
Under Circular 32/2013/TT-NHNN, which will take effect on February 10,in the territory of Vietnam, except for cases allowed, alltransactions, payments, quotations, advertisements, pricing, prices incontracts, agreements and similar forms (including conversion oradjustment of prices of goods and services, the value of contracts andagreements) of residents and non-residents will not be allowed to beconducted using foreign currencies.
Currently,Circular 16 also specifies those cases in which foreign currencyexchanges are allowed in Vietnam and in which banks, non-bank creditinstitutions and branches of foreign banks licensed to do business andprovide foreign exchange services are allowed to perform transactions,payments, quotations, advertisements, pricing, prices in contracts,agreements in foreign exchange within the scope of business and foreignexchange services permitted by the SBV in accordance with the law.
Other cases that allow foreign exchange transactions will beconsidered and approved by the SBV Governor on the basis of actualsituations and the necessities arising with each case.
The central bank recently confirmed that it will seek to maintain theUSD/VND exchange rate to within 2 percent of current value next year.This follows the VND being depreciated by 1 percent in 2013.
The central bank weakened the dong by 1 percent against the USD inJune last year, in what it said was a move to accurately reflect supplyand demand on foreign currencies.
The prevalence ofUSD in the Vietnamese economy had decreased significantly since the endof 2011 and the exchange rates had been stabilised. The decline ofdollarisation was seen in the narrowing ratio of foreign currencydeposits against total money supply. The figure fell from 30 percentin 1990, to 15.8 percent by the end of 2011, most recently dropping to12 percent by the end of August 2013, according to a SBV statement.
The central bank has also taken measures this year to stabiliseexchange rates and the foreign exchange market, helping to raise thecountry's forex reserves, support the implementation of monetary policyand control inflation.-VNA
Under Circular 32/2013/TT-NHNN, which will take effect on February 10,in the territory of Vietnam, except for cases allowed, alltransactions, payments, quotations, advertisements, pricing, prices incontracts, agreements and similar forms (including conversion oradjustment of prices of goods and services, the value of contracts andagreements) of residents and non-residents will not be allowed to beconducted using foreign currencies.
Currently,Circular 16 also specifies those cases in which foreign currencyexchanges are allowed in Vietnam and in which banks, non-bank creditinstitutions and branches of foreign banks licensed to do business andprovide foreign exchange services are allowed to perform transactions,payments, quotations, advertisements, pricing, prices in contracts,agreements in foreign exchange within the scope of business and foreignexchange services permitted by the SBV in accordance with the law.
Other cases that allow foreign exchange transactions will beconsidered and approved by the SBV Governor on the basis of actualsituations and the necessities arising with each case.
The central bank recently confirmed that it will seek to maintain theUSD/VND exchange rate to within 2 percent of current value next year.This follows the VND being depreciated by 1 percent in 2013.
The central bank weakened the dong by 1 percent against the USD inJune last year, in what it said was a move to accurately reflect supplyand demand on foreign currencies.
The prevalence ofUSD in the Vietnamese economy had decreased significantly since the endof 2011 and the exchange rates had been stabilised. The decline ofdollarisation was seen in the narrowing ratio of foreign currencydeposits against total money supply. The figure fell from 30 percentin 1990, to 15.8 percent by the end of 2011, most recently dropping to12 percent by the end of August 2013, according to a SBV statement.
The central bank has also taken measures this year to stabiliseexchange rates and the foreign exchange market, helping to raise thecountry's forex reserves, support the implementation of monetary policyand control inflation.-VNA
