Decision No. 96/2002/QD-TTg stipulates the mechanism for implementing the ASEAN swap agreement, with the State Bank of Vietnam as the leading agency and coordinating with relevant ministries and sectors. This decision applies to the State Bank of Vietnam and relevant ministries and sectors.
Scope of application
State Bank of Vietnam; Ministry of Finance, Ministry of Planning and Investment, Ministry of Trade
Key points
- The State Bank of Vietnam shall be responsible for performing the rights and obligations of Vietnam as a signatory to the Memorandum of Understanding on the ASEAN Swap Agreement.
- The Governor of the State Bank has the authority to decide on lending, the amount of money, type of foreign currency, term, and use of state foreign exchange reserves according to the provisions of the ASEAN Swap Agreement.
- The State Bank shall report to the Prime Minister about the loan immediately after disbursement and regularly monitor the situation to identify any difficulties.
- Upon maturity, the State Bank receives the principal and interest and transfers them into the state foreign exchange reserve; reports to the Prime Minister about the entire loan transaction.
- The State Bank is responsible for organizing accounting records of related transactions in accordance with current laws.
🌐 Social impact of this document
- Positive impact: Enhances international payment capability and supplements state foreign exchange reserves.
- Negative impact: May put pressure on the state budget if there is a large borrowing need.
❓ Frequently asked questions
What can the State Bank of Vietnam do when it receives a request for a loan under the ASEAN Swap Agreement?
The Governor of the State Bank has the right to decide on participating in lending fully, partially, or not participating in lending of Vietnam for each swap transaction.
What must the State Bank of Vietnam report to the Prime Minister?
The State Bank of Vietnam must report to the Prime Minister about the loan immediately after disbursement and the entire loan transaction under the ASEAN Swap Agreement upon maturity.
Under what circumstances may Vietnam borrow foreign currency from the ASEAN Swap Agreement?
Vietnam may only borrow when there is a severe deficit in the balance of payments, the economy faces a loss of international payment capability, or in other emergency situations.
What procedures must the State Bank of Vietnam undertake to receive borrowed funds?
The State Bank of Vietnam develops and submits to the Prime Minister for approval a borrowing plan, then proceeds with the procedures to receive the borrowed funds.
When does this decision take effect?
This decision takes effect from the date of signing.
Full text
DECISION
On the mechanism for implementing the ASEAN Swap Agreement
MINISTER TƯỚNG CHÍNHNH PHÓTRƯỞNG, CHỦ NHIỆM VĂN PHÒNG CHÍNH PHỦ,Within 10 working days from the date of receipt of the dossier as mentioned in Sub-clause b, Clause 1, Article 3 above, the Ministry of Foreign Affairs will review and submit to the competent authority for decision (Issues exceeding the Ministry of Foreign Affairs' jurisdiction will be referred to the Prime Minister for consideration and decision).
Pursuant to the Law on Organization of the Government dated December 25, 2001;
Pursuant to the Law on the State Bank of Vietnam dated December 12, 1997;
Pursuant to the Ordinance on the Conclusion and Implementation of International Treaties dated August 20, 1998;
Pursuant to the Memorandum of Understanding on the ASEAN Swap Agreement,
At the proposal of the Governor of the State Bank of Vietnam and the Minister, Head of the Government Office, 总理，政府办公厅主任，
ON - Office of the President of the StateArticleMINISTER
Article 1. The State Bank of Vietnam shall be the leading agency coordinating with relevant ministries and agencies to implement the rights and obligations of Vietnam as a party to the Memorandum of Understanding on the ASEAN Swap Agreement.
Article 2. When Vietnam receives a request for borrowing under the ASEAN Swap Agreement, the Governor of the State Bank of Vietnam is authorized to:
1. Decide whether to participate in lending fully or partially or not to lend at all for each swap transaction according to the provisions of the Memorandum of Understanding on the ASEAN Swap Agreement.
2. Decide the amount and type of foreign currency to lend for each swap transaction and the extension of such transactions when requested.
3. Utilize funds from the state foreign exchange reserve to carry out lending, with the total amount lent not exceeding 60 million USD (the maximum level Vietnam has committed to participate in the ASEAN Swap Agreement).
Article 3.
1. The State Bank of Vietnam shall report to the Prime Minister while sending copies to the Ministry of Finance, the Ministry of Planning and Investment, and the Ministry of Trade regarding the loan made by Vietnam immediately after disbursement.
2. The State Bank of Vietnam shall have the responsibility to regularly monitor the situation, promptly identify any issues arising during the implementation of the ASEAN Swap Agreement to report and seek guidance from the Prime Minister on the handling approach
Article 4. Upon maturity, the State Bank of Vietnam shall recover the principal and interest of the foreign currency loan made by Vietnam, transfer it into the state foreign exchange reserve; report to the Prime Minister, while sending copies to the Ministry of Finance, the Ministry of Planning and Investment, and the Ministry of Trade regarding the entire loan transaction of Vietnam under the ASEAN Swap Agreement.
Article 5. When Vietnam has a need to borrow under the ASEAN Swap Agreement:
1. Borrowing principle:
The Government borrows foreign currency from the ASEAN Swap Agreement to supplement the state foreign exchange reserve to implement national monetary policy.
a) Vietnam will only borrow under the ASEAN Swap Agreement when there is a severe deficit in the balance of payments, the economy faces international payment insolvency, or in other emergency situations.
b) Vietnam will only borrow if it can foresee its ability to repay the debt.
2. Purpose of borrowing and source of repayment:
The State Bank of Vietnam shall be responsible for repaying the principal and interest of the borrowed amount from the state foreign exchange reserve and balancing the corresponding VND funds from planned money issuance or additional money supply plans upon approval.
3. The State Bank of Vietnam shall lead and coordinate with the Ministry of Planning and Investment, the Ministry of Finance, and the Ministry of Trade to submit to the Prime Minister for approval the borrowing plan of Vietnam under the ASEAN Swap Agreement. The borrowing plan includes the total amount borrowed, the term of borrowing, the plan for using the borrowed capital, and the repayment plan.
4. Based on the approved borrowing plan by the Prime Minister, the State Bank of Vietnam shall carry out procedures to receive borrowed funds and open VND accounts for each lending country and record the VND amount in the books for these accounts corresponding to the foreign currency Vietnam has borrowed. Upon receipt of the borrowed funds, the State Bank of Vietnam shall record the National Foreign Exchange Reserve Fund and report to the Prime Minister while sending copies to the Ministry of of Finance, Ministry Planning and Investment and the Ministry of Trade and use the borrowed funds according to the approved plan.
5. After completing all borrowing and repayment transactions of Vietnam under the ASEAN Swap Agreement, the State Bank of Vietnam shall report to the Prime Minister while sending copies to the Ministry of of Finance, Ministry Planning and Investment and the Ministry of Trade.
Article 6. The State Bank of Vietnam shall be responsible for organizing accounting records for all transactions related to the ASEAN Swap Agreement of Vietnam in accordance with current laws. Interest income in foreign currency received when Vietnam lends and interest expense paid when Vietnam borrows, along with any incidental costs, shall be recorded as banking business income and expenses of the State Bank of Vietnam.
Article 7. When it is Vietnam's turn or when requested, the State Bank of Vietnam shall perform the role of Agent Bank as stipulated in the Memorandum of Understanding on the ASEAN Swap Agreement.
Article 8. The State Bank of Vietnam shall establish internal management mechanisms within the State Bank of Vietnam to quickly and safely implement the operations specified in the Memorandum of Understanding on the ASEAN Swap Agreement.
Article 9. All information, data, or documents related to the Memorandum of Understanding on the ASEAN Swap Agreement; transactions of borrowing and lending of Vietnam under the ASEAN Swap Agreement shall be kept confidential.
Article 10. This Decision takes effect from the date of signature.
Article 11. The State Bank of Vietnam shall lead and coordinate with relevant agencies to implement this Decision./.
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