Decision No. 679/2002/QD-NHNN On Issuing Certain Provisions Related to Foreign Currency Transactions of Credit Institutions Authorized to Conduct Foreign Exchange Business.

DECISION OF THE GOVERNOR OF THE STATE BANK OF VIETNAM

Regarding the issuance of certain regulations related to foreign currency transactions of

credit institutions permitted to operate in foreign currencies.

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated December 12, 1997, and the Law on Credit Institutions No. 02/1997/QH10 dated December 12, 1997; Pursuant to Decree No. I5/CP dated March 2, 1993 of the Government regarding the tasks, powers, and responsibilities for state management of ministries and ministerial-level agencies;

At the proposal of the Director of the Foreign Exchange Management Department,

The General Directors (Directors) of credit institutions permitted to operate in foreign currencies are authorized to set the buying rate and selling rate for immediate transactions (SPOT) of Vietnamese Dong against foreign currencies according to the following principles:

DECISION:

Article 1. 1. For US Dollar: It shall not exceed a margin of +0.25% (zero point two five percent) compared to the average exchange rate on the inter-bank foreign exchange market of the most recent trading day announced by the State Bank of Vietnam.

2. For other foreign currencies: To be determined by the General Directors (Directors) of credit institutions permitted to operate in foreign currencies.

3. The difference between the buying rate and the selling rate shall be determined by the General Directors (Directors) of credit institutions permitted to operate in foreign currencies.

Credit institutions permitted to operate in foreign currencies may only conduct forward and swap transactions with the following terms:

Article 2. 1. Minimum term: 7 (seven) days from the date of signing the transaction contract;

2. Maximum term: 180 (one hundred eighty) days from the date of signing the transaction contract.

The exchange rate for forward and swap transactions shall be implemented according to the following principles:

Article 3. 1. For transactions between Vietnamese Dong and US Dollar: The applicable exchange rate for each term shall not exceed the ceiling of the spot exchange rate applied at the time of signing the forward or swap contract (the average exchange rate on the inter-bank foreign exchange market announced by the State Bank of Vietnam plus 0.25%) plus the allowable increase (percentage of the ceiling of the spot exchange rate) specified for each specific term as follows:

For terms from 7 days to 30 days: 0.5%;

For terms from 31 days to 60 days: 1.2%;

For terms from 61 days to 90 days: 1.5%;

For terms from 91 days to 180 days: 2.5%.

2. For transactions involving other foreign currencies: To be determined by the General Directors (Directors) of credit institutions permitted to operate in foreign currencies.

Credit institutions shall charge transaction fees in accordance with the current regulations of the State Bank of Vietnam.

Article 4. This Decision takes effect from the date of signature and replaces the following documents: Decision No. 65/1999/QĐ-NHNN7 dated February 25, 1999 of the Governor of the State Bank of Vietnam on the principle of determining the buying and selling rates of foreign currencies for credit institutions permitted to operate in foreign currencies, Decision No. 289/2000/QĐ-NHNN7 dated August 30, 2000 of the Governor of the State Bank of Vietnam on amending Clause 1 of Article 2 of Decision No. 65/1999/QĐ-NHNN7 dated February 25, 1999 of the Governor of the State Bank of Vietnam, Decision No. 1198/2001/QĐ-NHNN dated September 18, 2001 of the Governor of the State Bank of Vietnam on amending certain provisions related to forward and swap transactions of credit institutions permitted to operate in foreign currencies.

Article 5. Any previous regulations that conflict with the provisions of this Decision are hereby abolished.

The Heads of the Office, the Director of the Foreign Exchange Management Department, the Heads of units under the Central Bank, the Governors of the Branches of the State Bank of Vietnam in provinces and centrally-administered cities, the Chairmen of the Boards of Directors and General Directors (Directors) of credit institutions permitted to operate in foreign currencies are responsible for implementing this Decision./.

Article 6. The Director of the Office, the Head of the Foreign Exchange Management Department, the Heads of units under the State Bank of Vietnam, the Governors of the State Bank Branches in provinces and centrally governed cities, the Chairmen of the Boards of Directors and General Managers (Directors) of authorized credit organizations are responsible for implementing this Decision./.