Method for Calculating the Selling Price of a State Bank Bill Applied from December 09, 2019

Illustrative image (source: internet)

To be specific, Article 5 of Circular 16/2019/TT-NHNN stipulates that the selling price of one (01) State Bank of Vietnam bill is determined according to the following formula:

In which:

G: Selling price of one (01) State Bank of Vietnam bill;

MG: Face value of the State Bank of Vietnam bill;

L: Interest rate of the State Bank of Vietnam bill (%/year);

t: Term of the State Bank of Vietnam bill (number of days).

Additionally, the total proceeds from the sale of State Bank of Vietnam bills is determined according to the following formula:

GG = G x N

In which:

GG: Total proceeds from the sale of State Bank of Vietnam bills;

G: Selling price of one (01) State Bank of Vietnam bill;

N: Quantity of State Bank of Vietnam bills issued.

Furthermore, Circular 16/2019/TT-NHNN also stipulates that State Bank of Vietnam bills are issued either by auction or by mandatory issuance. Specifically:

- Issuance by auction: Carried out in accordance with the State Bank of Vietnam's regulations on open market operations auction.- Issuance by mandatory method:

- Based on monetary policy objectives in each period and actual conditions, the State Bank of Vietnam decides on the mandatory issuance of State Bank of Vietnam bills to credit institutions. Credit institutions must purchase State Bank of Vietnam bills issued by mandatory method according to the Decision of the Governor of the State Bank of Vietnam;- If necessary, the State Bank of Vietnam may consider early repurchase of State Bank of Vietnam bills issued by the mandatory method. The Governor of the State Bank of Vietnam decides on the early repurchase of State Bank of Vietnam bills issued by the mandatory method.

See the full text of the regulations at Circular 16/2019/TT-NHNN which takes effect from December 09, 2019.

Thu Ba

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