Socialist Republic of Vietnam

DECISION OF THE GOVERNOR OF THE STATE BANK

On promulgation of some regulations relating to foreign currency transactions of credit institutions permitted to trade foreign currency

No. 679/2002/QD-NHNN, Hanoi, 1 July 2002

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THE GOVERNOR OF THE STATE BANK

- Pursuant to the Law on State Bank No. 01/1997/QH10 dated 12 December 1997 and the Law on Credit Institutions No. 02/1997/QH10 dated 12 December 1997;

- Pursuant to Decree No. 15/CP dated 02 March 1993 of the Government on duties, powers and responsibilities of the State management of Ministries and Ministerial-level agencies;

- At the proposal of the Director of the Department of Foreign Exchange Control,

DECIDES:

Article 1. General Directors (Directors) of credit institutions permitted to trade foreign currency shall be entitled to fix the spot buying and selling exchange rate of Vietnamese Dong and foreign currencies according to the following principles:

1. For US Dollar: Shall not be permitted to exceed the margin of ±0.25% (zero point twenty five percent) compared with the average exchange rate in the inter-bank foreign currency market of the most recent previous transaction day announced by the State Bank.

2. For other foreign currencies: shall be determined by General Directors (Directors) of credit institutions permitted to trade foreign currency.

3. Differences between buying and selling exchange rates shall be determined by General Directors (Directors) of credit institutions permitted to trade foreign currency.

Article 2. Credit institutions permitted to trade foreign currency shall be only allowed to conduct swap and forward transactions according to the following terms:

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

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

Article 3. Swap and forward transaction exchange rates shall be carried out according to the following principles:

1. For transactions between Vietnamese Dong and US Dollar: the exchange rate applicable to each maximum term shall not exceed the ceiling rate of the spot exchange rate applied at the time of signing swap and forward contracts (average exchange rate in the inter-bank foreign currency market announced by the State Bank plus 0.25%) to be added to the permitted increase rate (percentage rate of the ceiling rate of the spot exchange rate) stipulated for each specific term as follows:

- For term from 7 to 30 days: 0.5%;

- For term from 31 to 60 days: 1.2%;

- For term from 61 to 90 days: 1.5%;

- For term from 91 to 180 days: 2.5%

2. For transactions relating to other foreign currencies: shall be determined by General Directors (Directors) of credit institutions permitted to trade foreign currency.

Article 4. Credit institutions shall collect transaction fees in accordance with current regulations of the State Bank.

Article 5. This Decision shall take effect from the date of its signing and shall replace the following documents: Decision No. 65/1999/QD-NHNN7 dated 25 February 1999 of the Governor of the State Bank providing regulations on principles of determining buying and selling exchange rates of credit institutions permitted to trade foreign currency, Decision No. 289/2000/QD-NHNN7 dated 30 August 2000 of the Governor of the State Bank on amendment of clause 1, Article 2 of Decision No. 65/1999/QD-NHNN7 dated 25 February 1999 of the Governor of the State Bank, Decision No. 1198/2001/QD-NHNN dated 18 September 2001 of the Governor of the State Bank on amendment of some regulations relating to swap and forward transactions of credit institutions permitted to trade foreign currency.

Previous provisions which are contrary to the provisions provided for in this Decision shall be repealed.

Article 6. The Heads of Offices, the Director of the Department of Foreign Exchange Control, Heads of organizations under the Central State Bank, Directors of branches of the State Bank of provinces and cities under Central Authority, Chairmen of the Boards of Management and General Directors (Directors) of credit institutions permitted to trade foreign currency shall be responsible for the implementation of this Decision.

GOVERNOR OF THE STATE BANK
LE DUC THUY