05 operations of official management of foreign exchange reservestaken by the State Bank of Vietnam

According to Article 10 of Decree No. 50/2014/ND-CP of Vietnam’s Government, the State Bank carries out the official management of foreign exchange reserves through the following operations:

- Investment in international market;

-  Intervention in domestic market;

- Implementation of operations of foreign exchange derivatives;

- Implementation of bilateral or multi-lateral currency swap agreements with the Central Banks and international financial institutions;

- Other operations of official management of foreign exchange reserves shall be decided by the Governor of the State Bank in each period.

Official management of foreign exchange reserves must ensure the following principles: preservation, liquidity and profitability.

Besides, Decree No. 50/2014/ND-CP also stipulates the purchase and sale of foreign currencies between official foreign exchange reserves and the State budget as follows:

- The Ministry of Finance is responsible for deposit all of the foreign currencies of the State Treasury at the State Bank. Annually, the Ministry of Finance shall submit the foreign currency quota which shall be retained with permission for regular expenditure of the State budget. On the basis of foreign currency quota retained with the permission of the Prime Minister, the Ministry of Finance shall sell all of the remaining foreign currencies for supplementation of official foreign exchange reserves.

- Annually, no later than March 31, the Ministry of Finance shall give a written notice to the State Bank of the detailed plan for quarterly sale of foreign currencies for supplementation of official foreign exchange reserves.

Where the State Bank may not balance its foreign currencies for repayment of foreign debts of the Government and other demands for expenditure of foreign currencies of the State budget, the Ministry of Finance shall coordinate with the State Bank to prepare plans for balancing the sale of foreign currencies to the State budget.

View other provisions at Decree No. 50/2014/ND-CP of Vietnam’s Government, effective from July 15, 2014.

Thu Ba

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