Restrictions on foreign currency tightened
The State Bank of Vietnam (SBV) has issued regulations on restricting the use of foreign currency in the country.
Under Circular 32/2013/TT-NHNN, in the territory of Vietnam, except for cases allowed, all transactions, payments, quotations, advertisements, pricing, prices in contracts, agreements and similar forms (including conversion or adjustment of prices of goods and services, the value of contracts and agreements) of residents and non-residents will not be allowed to be conducted using foreign currency.
Currently, Circular 16 also specifies those cases in which foreign currency exchanges are allowed in Vietnam and in which banks, non-bank credit institutions and branches of foreign banks licensed to do business and provide 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 foreign exchange services permitted by the State Bank of Vietnam (SBV) in accordance with the law.
Other cases that allow foreign exchange transactions will be considered and approved by the SBV Governor based upon actual situations and the necessities arising with each case.
The Circular will take effect on February 10, 2014.
The central bank recently confirmed that it will seek to maintain the dollar/dong exchange rate to within 2 per cent of current value next year. This follows the dong being depreciated by 1 per cent in 2013.
The central bank weakened the dong by 1 per cent against the US dollar in June last year, in what it said was a move to accurately reflect supply and demand on foreign currencies.