Vietnam: Determination of purchasing price or selling price of financial instruments in the open market operation

14:52, 05/01/2016

On December 31, 2015, the State Bank of Vietnam issued Circular No. 42/2015/TT-NHNN on open market operation, which specifies the determination of purchasing price or selling price of financial instruments.

According to Circular No. 42/2015/TT-NHNN of the State Bank of Vietnam, selling price between the State bank and the member is calculated as follows:

GTT = G * (1 - h)

In which:

- GTT: Selling price

- G: Value of the financial instrument at the valuation time

- h: The difference rate between the value of the financial instrument at the valuation time and selling price.

Moreover, according to Circular No. 42/2015/TT-NHNN, re-purchasing price between the State bank and the members is calculated as follows:

In which:

- Gm: Re-purchasing price

- GTT: Selling price

- L: Fixed interest rate or variable interest rate (in case of interest-rate tender) or interest rate announced by the State bank (in case of volume tender) at the bidding session (%/year)

- tb: Repo/reverse repo period (number of days).

View formulas for calculating purchasing price or selling price of financial instruments at Circular No. 42/2015/TT-NHNN of the State Bank of Vietnam, which takes effect from April 30, 2016.

- Khanh Chi -

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