Circular No. 02/2021/TT-NHNN guiding foreign exchange transactions on the interbank foreign exchange market by credit institutions permitted to operate in foreign exchange

CIRCULAR

Guidelines for foreign currency transactions on the foreign exchange market of credit institutions authorized to operate in foreign exchange

Pursuant to the Law on the State Bank of Vietnam dated June 10, 2010; 16 June 2010;

Pursuant to the Law Ccredit institutions dated June 16, 202010 and Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions No. 17/2017/QH14; dated 20 the 11 Pursuant to Decree No. 32/2019/NĐ-CP dated April 10, 2019 of the Government on assigning tasks, procurement or tendering for the supply of products and services using state budget from regular operating expenses;17;

CamendPursuant to the Ordinance lon Foreign Exchange N |||dated December 13, 2005 and the Ordinance Amending and Supplementing Certain Provisions of the Ordinance on Foreign ExchangeNo.dated March 18, 2013;, amended and supplemented by Decree No. 109/2025/NĐ-CP and Decree No. 193/2025/NĐ-CPI, supplementing some Articles of the Ordinance; N |||on foreign exchange dated March 18, 2013;

Pursuant to DecreeNo. Decision No. 70/2014/NĐ-CP dated July 17, 2014 of the Government detailing the implementation of certain provisions of the Ordinance on Foreign ExchangeNo. and the Ordinance Amending and Supplementing Certain Provisions of the Ordinance on Foreign Exchange;No.I and the Ordinance amending and supplementing some Articles of the foreign exchange Ordinance;

Pursuant to Decree No. 16/2017/NĐ-CP dated 17 the 02 Article 2. The receipt, handling of reflections and petitions from individuals and organizations concerning administrative regulations shall be carried out in accordance with Decree No. 20/2008/NĐ-CP dated February 14, 2008 of the Government on the receipt, handling of reflections and petitions from individuals and organizations concerning administrative regulations (amended and supplemented by Decree No. 48/2013/NĐ-CP dated May 14, 2013 on amending and supplementing certain articles of decrees related to administrative procedure control and Decree No. 92/2017/NĐ-CP dated August 7, 2017 on amending and supplementing certain articles of decrees related to administrative procedure control).7 Government's decisiony on the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;âstate of Vietnam;

Article 1.

The Governor of the State Bank of Vietnam promulgates this Circular to guide foreign currency transactions on the foreign exchange market of credit institutions authorized to operate in foreign exchange.êforeign exchange market of credit organizations permitted to operate in foreign exchange.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

Article 1. This Circular guides foreign currency transactions on the domestic foreign exchange market between credit institutions authorized to operate in foreign exchange with each other and between credit institutions authorized to operate in foreign exchange and customers.

Article 2. Foreign currency transactions between credit institutions authorized to operate in foreign exchange and the State Bank of Vietnam (hereinafter referred to as the State Bank) shall be carried out in accordance with separate regulations of the State Bank.

Article 3. This Circular does not regulate foreign currency transactions on the international market. Credit institutions authorized to operate in foreign exchange shall conduct such transactions within the scope specified in the License for Establishment and Operation or the Decision amending and supplementing the License according to the regulations of the State Bank or the Decision approving temporarily other foreign exchange activities and/or other individual documents of the Government, Prime Minister, and the State Bank (hereinafter collectively referred to as the License). They shall bear full responsibility for these transactions and comply with legal provisions on ensuring safety and preventing risks.

Article 2. Interpretation of Terms

In this Circular, the following terms are understood as follows:

1. Credit institutions authorized to operate in foreign exchange refer to banks, non-bank credit institutions, and branches of foreign banks engaged in foreign exchange business and services (hereinafter referred to as authorized credit institutions).

2. Customers include:

a) Resident individuals are economic organizations (including authorized credit institutions), other organizations, and individuals;

b) Non-resident individuals are organizations and individuals.

3. Economic organization refers to an entity established and operating under Vietnamese law, including enterprises, cooperatives, cooperative unions, and other entities conducting investment and business activities, except for authorized credit institutions.

4. Other organizations mentioned in point a, Clause 2 of this Article refer to entities established and operating under Vietnamese law, excluding those stipulated in Clause 1 and Clause 3 of this Article.

5. Counterparties of authorized credit institutions include other authorized credit institutions and customers.

6. Types of foreign currency transactions include spot foreign currency transactions; forward foreign currency transactions; foreign currency swap transactions; foreign currency option transactions.

The term "foreign currency transaction" in this Circular is synonymous with the term "exchange transaction" defined in other regulatory legal documents issued by the Governor of the State Bank.

7. Spot foreign currency transactions (hereinafter referred to as spot transactions) are transactions where both parties commit to buying or selling a certain amount of one currency against another at a rate determined at the time of the transaction, with the maximum payment date being two working days from the transaction date.

8. Forward foreign currency transactions (hereinafter referred to as forward transactions) are transactions where both parties commit to buying or selling a certain amount of one currency against another at a rate determined at the time of the transaction, with the minimum payment date being three working days from the transaction date.

9. Foreign currency swap transactions (hereinafter referred to as swap transactions) are transactions between two parties, consisting of one purchase transaction and one sale transaction involving the same quantity of one currency against another at rates determined at the time of the transaction, with different settlement dates for the two transactions.

Swap transactions may consist of two spot transactions or two forward transactions or one spot transaction and one forward transaction.

10. Foreign currency option transactions (hereinafter referred to as option transactions) are transactions between two parties, wherein the buyer pays the seller an option premium to have the right but not the obligation to buy or sell a certain amount of one currency against another within an agreed period according to an execution rate determined at the time of the transaction and settled on a future date. If the buyer chooses to exercise the right, the seller must fulfill the obligation according to the commitment.

In option transactions, selling the option of one currency (Put option) simultaneously grants the option to buy another currency (Call option).

11. Option premium is the amount that the buyer must pay to the seller to purchase a call or put option in an option transaction.

12. Expiration date of an option transaction is the last day when the buyer can choose to exercise the right but not later than two working days before the settlement date.

13. Transaction date is the date when both parties establish the transaction agreement as prescribed in this Circular.

14. Settlement date is the date when both parties transfer the agreed amount of currency bought or sold according to the established transaction agreement. In case the settlement date coincides with a weekly holiday or a holiday of the Vietnamese foreign exchange market and/or the market handling payment for the foreign currency involved in the transaction, the settlement date may be postponed to the next working day.

15. Trading department is a business unit of an authorized credit institution responsible for negotiating foreign currency transactions with counterparties.

16. Trading support department is a business unit of an authorized credit institution responsible for creating, sending, and receiving confirmation of transactions with counterparties.

17. A transaction representative is an individual belonging to the transaction department, authorized in writing by a permitted credit institution in accordance with the provisions of the law, which specifies the authority to establish agreements with counterparties that are other permitted credit institutions.

18. An authorized person is an individual responsible for approving contents within the functions and tasks assigned by a permitted credit institution in its internal regulations.

Article 3. Principles of Transaction Implementation

1. The implementation of foreign currency transactions must comply with the provisions of this Circular, the scope of foreign exchange operations of each credit institution, and overseas bank branches according to their Licenses. For foreign currency transactions that credit institutions and overseas bank branches are not permitted to conduct or provide, such credit institutions and overseas bank branches may only carry out foreign currency transactions with other permitted credit institutions in the role of economic organizations as stipulated in this Circular.

2. Parties involved in foreign currency transactions must establish and implement transactions based on principles of honesty, transparency, and self-responsibility for their transaction decisions.

3. Foreign currency transactions with other permitted credit institutions can only be conducted by the headquarters of banks, non-bank financial institutions, or the branch offices of overseas banks operating in Vietnam that are authorized to provide foreign exchange services. This provision does not apply to transactions in currencies of countries sharing borders with Vietnam at border areas and border economic zones.

Article 4. Types and Scope of Permitted Transactions

1. Permitted credit institutions may conduct spot transactions, forward transactions, swap transactions, and option transactions with other permitted credit institutions.

2. Permitted credit institutions may conduct spot transactions, forward transactions, swap transactions, and sale of option transactions with economic organizations.

3. Permitted credit institutions may conduct spot transactions with resident organizations and individuals.

4. Permitted credit institutions may conduct spot transactions with non-resident organizations and individuals, and forward sale of foreign currency transactions with non-residents as specified in Clause 5 of this Article.

5. Permitted credit institutions may conduct forward sale of foreign currency transactions with non-resident foreign investors who own government bonds denominated in Vietnamese Dong issued in the domestic market to hedge against exchange rate risks for their bond investments.

Article 5. Transaction Currency and Exchange Rates

1. Permitted credit institutions must specify the types of foreign currencies traded at their institutions.

2. The spot exchange rate between Vietnamese Dong and US Dollar in spot transactions and spot transactions within swap transactions shall be determined based on the central parity rate published by the State Bank of Vietnam on the transaction date and within the range of fluctuation allowed by the State Bank of Vietnam.

3. The forward exchange rate between Vietnamese Dong and US Dollar in forward transactions and forward transactions within swap transactions shall be agreed upon by the parties but shall not exceed the rate determined based on:

a) The spot exchange rate on the transaction date;

b) The difference between two current interest rates, namely the rediscount rate announced by the State Bank of Vietnam and the Federal Funds Target Rate of the Federal Reserve System of the United States. In case the Federal Funds Target Rate falls within a range, the lowest rate within that range shall be applied.

c) The term of the transaction.

4. The exchange rate between Vietnamese Dong and other foreign currencies besides US Dollar, and the exchange rate between different foreign currencies in foreign currency transactions shall be agreed upon by the parties.

5. Permitted credit institutions must display the spot exchange rate between Vietnamese Dong and other foreign currencies in transactions with customers at their foreign exchange transaction locations and on their official website (if available). Permitted credit institutions shall conduct transactions with customers based on the displayed exchange rate, except when both parties agree on a different exchange rate applicable at the time of the transaction.

Article 6. Term of Transactions

1. The term of forward transactions, forward transactions within swap transactions, and forward transactions within option transactions shall be agreed upon by the parties, except for cases stipulated in Clause 2 of this Article.

2. The term of forward transactions involving Vietnamese dong and foreign currencies in swap transactions shall not exceed 365 (three hundred sixty-five) days from the date of transaction.

Article 7. Transaction Methods

1. Foreign currency transactions may be conducted through direct transactions or via transaction means, including telephone and electronic means.

2. Foreign currency transactions conducted via electronic means or telephone shall be agreed upon and the responsibility for ensuring security, safety, protection of data messages, and information confidentiality shall lie with the parties in accordance with the provisions of the Law on Electronic Transactions. Data messages shall have the same effect as written documents if they meet the requirements set forth in Article 12 of the Law on Electronic Transactions. Foreign currency transactions conducted through electronic means must comply with the provisions of the Law on Electronic Transactions and related guiding documents.

3. In the case of transactions conducted via telephone, authorized credit institutions must specify and notify counterparties of the permitted telephone numbers to be used for transactions. Telephones must have recording functions to ensure that the content of transaction agreements with counterparties can be retrieved for purposes of transaction confirmation, internal control of the credit institution, and dispute resolution (if any).

Article 8. Transaction Fees

Authorized credit institutions are not allowed to charge fees for foreign currency transactions.

Article 9. Transaction Time

1. Authorized credit institutions may establish rules regarding transaction times with counterparties.

2. For transactions occurring outside the established time periods, authorized credit institutions must organize measures to manage and monitor such transactions to prevent risks. Transactions outside the established time periods must be approved by authorized personnel and recorded in the foreign currency status of the authorized credit institution on the transaction date.

Article 10. Content of Transaction Agreements

1. The transaction agreement between authorized credit institutions and counterparties must include at least the following contents:

a) Names of the parties involved in the transaction;

b) Date of transaction;

c) Currency pair;

d) Quantity of foreign currency;

đ) Exchange rate;

e) Payment date;

g) Option premium (for option transactions);

h) Expiry date (for option transactions).

2. In addition to the contents specified in Clause 1 of this Article, the transaction agreement between authorized credit institutions must also include the following contents:

a) Transaction representative;

b) Payment instructions;

c) Transaction means;

d) Form of transaction confirmation, authority of the person confirming the transaction for transactions conducted via electronic means or telephone.

3. In addition to the contents specified in Clauses 1 and 2 of this Article, the parties may agree on other contents in accordance with the provisions of this Circular and relevant laws.

4. The transaction agreements specified in Clauses 1, 2, and 3 of this Article shall be established in the form of framework agreements and/or specific agreements.

Chapter II

SPECIFIC PROVISIONS

Part I: FOREIGN CURRENCY TRANSACTIONS BETWEEN AUTHORIZED CREDIT INSTITUTIONS ON THE INTERBANK FOREIGN EXCHANGE MARKET

Article 11. Transaction Agreement

1. The transaction representatives of both parties shall establish the contents of the foreign currency transaction agreement within the scope of authorized limits and authority, and ensure at least the contents prescribed in Clause 1 and Clause 2 of Article 10 of this Circular.

2. The transaction agreement established by the transaction representatives of both parties through transaction means shall be commitments that cannot be unilaterally changed, and can only be changed or canceled upon mutual written agreement of both parties.

3. Credit institutions permitted shall bear responsibility for authorizing and setting transaction limits for transaction representatives, and have the obligation to execute foreign currency transactions established by transaction representatives with counterparties.

Article 12. Transaction Confirmation

1. After the transaction agreement is established through electronic means or telephone, both parties must create and send each other a transaction confirmation. The business support department for transactions of each party shall immediately create and send the transaction confirmation on the day of the transaction. For transactions arising after the specified time, the transaction confirmation must be sent no later than the next working day following the transaction date.

2. The content of the transaction confirmation shall be agreed upon by the parties but must ensure at least the information prescribed in Clause 1 of Article 10 of this Circular and approval from the authorized person to confirm transactions as stipulated in Point d of Clause 2 of Article 10 of this Circular.

3. In cases where the transaction confirmation is sent through the SWIFT system (Society for Worldwide Interbank and Financial Telecommunication), credit institutions permitted must establish procedures for creating, sending, and receiving confirmation messages to ensure safety and prevent risks. Credit institutions permitted must comply with the provisions of the Electronic Transactions Law and relevant laws.

4. In cases where the transaction confirmation is sent via fax or attached to an email, both parties must send each other the original copy within ten (10) working days from the transaction date.

Article 13. Documents in Transactions

When conducting foreign currency transactions with another permitted credit institution, a permitted credit institution does not need to present documents proving the purpose of using foreign currency.

Part II: FOREIGN CURRENCY TRANSACTIONS BETWEEN PERMITTED CREDIT INSTITUTIONS AND CUSTOMERS

Article 14. Transaction Agreement

1. Permitted credit institutions and customers shall establish a transaction agreement in accordance with the law and ensure at least the contents prescribed in Clause 1 of Article 10 of this Circular.

2. The transaction agreement shall be implemented by the transaction department of the permitted credit institution according to the internal foreign currency transaction process issued by the permitted credit institution. The established transaction agreement is a commitment that cannot be unilaterally changed, and can only be changed or canceled upon mutual written agreement of both parties.

3. In cases where customers directly conduct transactions at the transaction location of the permitted credit institution, both parties shall establish a transaction agreement in writing and signed by the authorized person.

Article 15. Transaction Confirmation

1. In cases where the transaction agreement is established through telephone or electronic means, both parties must create a written transaction confirmation, ensuring at least the contents prescribed in Clause 1 of Article 10 of this Circular and signed by the authorized person.

2. The transaction confirmation must be created and sent no later than the next working day following the transaction date.

3. In cases where both parties sign a framework agreement in writing, which includes the customer's agreement for the permitted credit institution to automatically execute foreign currency transactions, the permitted credit institution shall implement according to the contents stipulated in the framework agreement but must notify the customer about the executed transaction information and ensure at least the contents prescribed in Clause 1 of Article 10 of this Circular.

4. In cases where the transaction confirmation is sent via fax or attached to an email, both parties must send each other the original copy within ten (10) working days from the transaction date.

Article 16. Documents in Transactions

1. Customers must present documents providing full information on the purpose, quantity, type of foreign currency, payment term, and transfer of money according to current foreign exchange management regulations and the provisions of permitted credit institutions when conducting the following foreign currency transactions with permitted credit institutions:

a) Purchasing foreign currency in spot transactions, forward transactions;

b) Purchasing foreign currency in swap transactions between foreign currency and Vietnamese dong, purchasing foreign currency in transactions with settlement date earlier than the swap transaction between foreign currencies;

c) Purchasing foreign currency options (presenting documents for the type of foreign currency received).

2. In cases where the customer's foreign currency payment plan changes due to objective reasons that have been agreed upon beforehand by the permitted credit institution and the customer, based on the customer's written request accompanied by documents proving the necessity to modify the term of the transaction, the permitted credit institution and the customer may conduct a swap transaction to adjust the term of the previously signed forward transaction in accordance with the term on the presented documents. The total term of the originally signed forward transaction and subsequent swap transactions shall not exceed 365 (three hundred sixty-five) days from the transaction date.

3. For foreign currency loans with an initial loan term or remaining loan term exceeding 365 (three hundred sixty-five) days, customers may use Vietnamese dong to purchase a 365 (three hundred sixty-five)-day forward foreign currency from a permitted credit institution for the purpose of hedging against exchange rate risks. Based on the customer's written request, within two working days before the maturity date of the signed forward transaction, the permitted credit institution and the customer may conduct a swap transaction to extend the term of the signed transaction. The term of the forward transaction in the swap transactions is 365 (three hundred sixty-five) days or equal to the remaining term of the loan if the remaining term of the loan is less than 365 (three hundred sixty-five) days. The total term of the forward transaction and subsequent swap transactions shall not exceed the total term of the loan.

4. Regarding the forward foreign currency purchase transactions of foreign investors as stipulated in Clause 5, Article 4 of this Circular:

a) When conducting a forward foreign currency purchase transaction with a permitted credit institution, foreign investors must provide documents proving ownership of government bonds, ensuring that the value and term of the foreign currency transaction do not exceed the purchase price and remaining term of the government bond. Within seven working days from the date of the forward foreign currency purchase transaction, foreign investors must provide additional documents to freeze the aforementioned government bonds at the Vietnam Securities Depository and Clearing Corporation to make the signed forward transaction effective.

b) Within two working days before the maturity date of the forward transaction, if foreign investors need to continue hedging against exchange rate risks for the government bonds, the permitted credit institution and the customer may conduct a swap transaction to extend the term of the signed forward transaction. The permitted credit institution must ensure that the term of this swap transaction and subsequent swap transactions (if any) does not exceed the remaining term of the frozen government bond. The total term of the forward transaction and subsequent swap transactions shall not exceed the term of the frozen government bond.

Article 17. Sale of foreign currency for transactions not yet due for settlement

1. For customer requests to purchase foreign currency in advance using Vietnamese Dong based on documents and certificates specified in Article 16 of this Circular at least three (3) working days before the payment deadline, permitted credit institutions may only sell forward foreign currency, except for the following cases:

a) Foreign investors purchasing foreign currency and transferring it abroad in accordance with Article 9 of Decree No. 70/2014/NĐ-CP dated July 17, 2014 of the Government detailing certain provisions of the Foreign Exchange Law and amendments and supplements to certain provisions of the Foreign Exchange Law;

2. The last day of the term in the forward transaction specified in Clause 1 of this Article shall not be earlier than five (5) working days before the payment deadline according to the customer's documents and certificates.

Chapter III

 LIABILITY OF ORGANIZATIONS, INDIVIDUALS AND

UNITS UNDER THE STATE BANK OF VIETNAM

Article 18. Liability of permitted credit institutions

1. Issuing internal regulations on procedures for implementing foreign currency transactions in compliance with this Circular and relevant laws, including at least the following contents:

a) Regulations on responsibilities and authorities of individuals and departments involved in foreign currency transactions to ensure compliance with the internal control system of commercial banks and foreign bank branches.

b) Separation of functions and tasks between trading departments and support departments in transactions with other permitted credit institutions to ensure that the establishment and implementation of a foreign currency transaction involves the participation of both departments.

2. Issuing internal regulations on risk management in foreign currency transactions in compliance with the State Bank of Vietnam and related legal documents.

3. Guiding customers to understand and comply with the contents stipulated in this Circular and other foreign exchange management regulations before providing foreign exchange services and conducting foreign currency transactions with customers.

4. Checking, reviewing, and storing customer documents and certificates in accordance with actual transactions to ensure that foreign currency transactions are carried out for the intended purpose and in compliance with legal provisions on foreign exchange management.

5. Implementing foreign currency transaction reports in accordance with the reporting and statistical system of the State Bank of Vietnam.

Article 19. Liability of customers

When conducting foreign currency transactions with permitted credit institutions, customers have the responsibility to:

1. Strictly comply with the provisions of this Circular.

2. Bear legal responsibility for the authenticity of the documents and certificates presented to permitted credit institutions.

Article 20. Liability of units under the State Bank of Vietnam

1. The Monetary Policy Department serves as the focal point for handling issues arising from the implementation of foreign currency transactions during the implementation of this Circular.

2. Banking inspection and supervision agencies, State Bank of Vietnam branches in provinces and centrally-administered cities have the responsibility to:

a) Inspect, audit, and supervise the implementation of this Circular's provisions and handle violations in accordance with the law;

b) Notify the Monetary Policy Department about the issuance of Licenses for establishment and operation, Decisions amending and supplementing Licenses for establishment and operation, approvals for foreign exchange activities, or other documents related to foreign exchange activities issued by the State Bank of Vietnam to credit institutions and foreign bank branches.

3. Units under the State Bank of Vietnam within their assigned functions and tasks have the responsibility to handle issues arising from the implementation of this Circular's provisions.

Chapter IV

IMPLEMENTING PROVISIONS

Article 21. Effective Date

1. This Circular takes effect from May 17, 2021, and replaces Circular No. 15/2015/TT-NHNN dated October 2, 2015, guiding foreign currency transactions in the foreign exchange market by permitted credit institutions.

2. For foreign currency transaction agreements established and effective before the date this Circular takes effect, credit institutions, foreign bank branches, and customers may continue to implement them according to the established agreements. Amendments and supplements to these agreements after this Circular takes effect can only be made if the amended and supplemented content complies with the provisions of this Circular.

Article 22. Responsibility for Implementation

The Director of the Office, the Head of the Monetary Policy Department, and the Heads of units under the State Bank of Vietnam, credit institutions, and foreign bank branches are responsible for organizing the implementation of this Circular./.