Is it possible to negotiate a forward rate in foreign currencies in foreign exchange forward in Vietnam?

Is it possible to negotiate a forward rate in foreign currencies in foreign exchange forward in Vietnam?

Pursuant to Clause 3, Article 5 of Circular 02/2021/TT-NHNN stipulating currencies and exchange rates as follows:

3. The forward rate between VND and USD in an FX forward or an FX forward within a currency swap shall be agreed upon by the parties thereto but not exceed the exchange rate determined based on:

a) The spot exchange rate on the transaction date;

b) The difference between two existing interest rates which are the refinancing interest rate announced by the State Bank and Federal Funds Target Rate. If the Federal Funds Target Rate is within the margin, the lowest interest rate in the margin shall apply.

c) Term of the transaction.

Thus, according to the above regulations in Vietnam, your organization can negotiate the forward rate between Vietnam Dong and the US Dollar in the foreign exchange forward, however, it will have to rely on the listed regulations.

What are must-have contents in foreign currency trading in Vietnam?

In Clause 1, Article 10 of Circular 02/2021/TT-NHNN, a written agreement on foreign currency transaction between an authorized credit institution and its partner must contain the following basic information:

a) Names of the parties;

b) Transaction date;

c) Currencies of the transaction;

d) Amount of foreign currencies;

dd) Exchange rate;

e) Payment date;

g) Premium (for FX option transactions);

h) Expiration date (for FX option transactions).

Best Regards!