Laws of Vietnam

DECIDES:

Article 1.- To allow the General Directors (Directors) of the credit institutions licensed to trade in foreign currencies to determine the spot buying rates and selling rates of Vietnam dong against foreign currencies on the following principles:

1. For the US dollar: The maximum exchange rate must not be 0.1% (zero point one per cent) higher than the average transaction exchange rate on the inter-bank foreign exchange market of the latest transaction day announced by the State Bank;

2. For other foreign currencies: the rates shall be determined by the General Directors (Directors) of the credit institutions licensed to trade in foreign currencies;

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

Article 2.- The exchange rates applicable to the forward and swap foreign exchange transactions shall be effected on the following principles:

1. For Vietnam dong-US dollar transactions: These exchange rates must not exceed the ceiling spot exchange rates (the average transaction exchange rates on the inter-bank foreign exchange market announced by the State Bank plus 0.1%) plus the permitted added levels (percentage of the ceiling spot exchange rates) prescribed for specific terms as follows:

For the first 30 days: 0.58%

From 31 to under 45 days: 0.87%

From 45 to under 60 days: 1.16%

From 60 to under 75 days: 1.45%

From 75 to under 90 days: 1.75%

From 90 to under 105 days: 2.04%

From 105 to under 120 days: 2.33%

From 120 to under 135 days: 2.62%

From 135 to under 150 days: 2.92%

From 150 to under 165 days: 3.21%

From 165 to under 180 days: 3.50%

2. For transactions related to other foreign currencies: The exchange rates shall be determined by the General Directors (Directors) of the credit institutions licensed to trade in foreign currencies.

Article 3.- The General Directors (Directors) of the credit institutions shall only be allowed to conduct forward and swap transactions for the following terms:

1. The minimum term of 1 month from the date of signing a transaction contract;

2. The maximum term of 6 months from the date of signing a transaction contract.

Article 4.- The credit institutions shall be allowed to collect a transaction fee (for spot, forward and swap transactions) at the maximum rate of 0.05% of each transaction’s value, but must not exceed 1,000,000 VND (one million VND) and such fee shall be calculated in VND.

Article 5.- This Decision takes effect from February 26, 1999 and replaces Decision No.267/1998/QD-NHNN7 of August 6, 1998 and Decision No.289/1998/QD-NHNN7 of August 26, 1998 of the State Bank Governor.

The forward and swap transaction contracts signed before February 26, 1999 shall not be subject to this Decision.

Article 6.- The Director of the State Bank’s Office, the head of the Department for Foreign Exchange Management, the heads of the units attached to the Central State Bank, the Directors of the provincial/municipal State Bank branches, the Managing Board Chairmen and General Directors (Directors) of the credit institutions licensed to trade in foreign currencies shall have to implement this Decision.

For the State Bank Governor
Deputy Governor
LE DUC THUY