This Decision sets out the principles for determining exchange rates for foreign currency forward transactions and swaps by credit institutions permitted to conduct such transactions, and specifies the maximum transaction fee. It applies to credit institutions authorized to set exchange rates in accordance with the regulations.
Scope of application
General Directors (Directors) of credit institutions permitted to conduct forward foreign exchange transactions and swaps
Key points
- General Directors (Directors) of credit institutions → may set exchange rates for buying and selling forward transactions and swaps between Vietnamese dong and US dollar not exceeding the maximum limit of the spot rate plus specific percentage levels
- General Directors (Directors) of credit institutions → may set exchange rates for transactions between Vietnamese dong and other foreign currencies and between foreign currencies themselves without exchange rate spread limits
- Credit institutions → may charge a maximum foreign exchange transaction fee of 0.05% of the transaction amount but not exceeding 1,000,000 Vietnamese dong
🌐 Social impact of this document
- Positive impact: Reduces exchange rate risk for credit institutions, creating opportunities for them to adjust exchange rates according to market conditions.
- Negative impact: May lead to unstable exchange rate fluctuations if credit institutions set exchange rates too high or low.
❓ Frequently asked questions
How do credit institutions determine the exchange rates for foreign currency forward transactions and swaps?
General Directors (Directors) of credit institutions are authorized to set exchange rates for buying and selling forward transactions and swaps between Vietnamese dong and US dollar not exceeding the maximum limit of the spot rate plus specific percentage levels as prescribed.
Are there exchange rate spread limits for credit institutions setting exchange rates between Vietnamese dong and other foreign currencies?
No, the State Bank does not prescribe exchange rate spread limits for transactions between Vietnamese dong and other foreign currencies and between foreign currencies themselves.
What is the maximum transaction fee that credit institutions can charge?
Credit institutions may charge a maximum foreign exchange transaction fee of 0.05% of the transaction amount but not exceeding 1,000,000 Vietnamese dong.
When does this Decision take effect?
This Decision takes effect fifteen days from the date of signature.
Who are the credit institutions permitted to conduct forward foreign exchange transactions and swaps?
General Directors (Directors) of credit institutions permitted to conduct forward foreign exchange transactions and swaps.
Full text
Pursuant to …;
Vconcerning the principles for determining the exchange rates for forward foreign currency purchases and sales, and swaps by credit institutions permitted to conduct forward foreign exchange transactions and swaps.
swap transactions of credit institutions permitted to conduct forward foreign exchange transactions, swap transactions
GOVERNOR OF THE STATE BANK OF VIETNAM
Pursuant to the State Bank Law promulgated by Decree No. 37-LCT/HĐNN8 dated April 24, 1990 of the Chairman of the Council of State of the Socialist Republic of Vietnam;
Pursuant to Government Decree No. 15/CP dated March 2, 1993 on the tasks, powers, and responsibilities for state management of ministries and ministerial-level agencies;
Pursuant to Government Decree No. 161/HĐBT dated October 18, 1988 of the Council of Ministers issuing the "Foreign Exchange Management Regulations" of the Socialist Republic of Vietnam;
At the proposal of the Director of the Department of Foreign Exchange Management;
DECISION:
Article 1. Now permits the General Directors (Directors) of credit institutions permitted to conduct forward foreign exchange transactions and swaps to set the forward purchase-sale exchange rate and swap rate between the Vietnamese dong and the US dollar not exceeding the maximum limit of the spot exchange rate (the official exchange rate plus the margin according to the current regulations of the Governor of the State Bank) at the time of transaction plus specific percentage levels relative to the maximum limit of the spot exchange rate for each term as follows:
Term up to 1 month: 1%;
From 3 to 4 months: 2.5%;
From 1 to 2 months: 1.5%;
From 4 to 5 months: 3%;
From 2 to 3 months: 2%;
From 5 to 6 months: 3.5%;
Article 2. The General Directors (Directors) of credit institutions permitted to conduct forward foreign exchange transactions and swaps may set the exchange rate for transactions between the Vietnamese dong and other foreign currencies and between other foreign currencies, with the State Bank not specifying a margin limit for such exchange rates.
Article 3. Credit institutions are allowed to charge foreign exchange transaction fees (spot transaction fees, forward transaction fees, and swap fees) with a maximum fee of 0.05% of the transaction amount per transaction, but not exceeding 1,000,000 Vietnamese dong (one million Vietnamese dong).
Article 4. This Decision shall take effect fifteen days from the date of signature.
Article 5. The Director of the Governor's Office, Heads of Departments, Branches of the State Bank of Vietnam, Governors of the State Bank branches in provinces and cities, General Directors, and Directors of credit institutions are responsible for implementing this Decision./.
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