Vietnam: Foreign exchange quota of the exchange rate stabilization and gold market management Fund

According to Article 17 of Decree No. 50/2014/ND-CP of Vietnam’s Government, the foreign exchange quota of the exchange rate stabilization and gold market management Fund shall be decided by the Prime Minister in each period. Based on the foreign exchange quota of the exchange rate stabilization and gold market management Fund approved by the Prime Minister and the situation of foreign currencies and gold in the country, the Governor of State Bank shall decide the maximum level of foreign currencies to purchase gold in the international market of the exchange rate stabilization and gold market management Fund in each period.

Besides, the Governor of the State Bank shall decide the transfer of foreign exchange from the exchange rate stabilization and gold market management Fund to the foreign exchange reserve Fund when the balance of the exchange rate stabilization and gold market management Fund exceeds the quota approved by the Prime Minister.

Where the balance of foreign exchange of the exchange rate stabilization and gold market management Fund does not meet requirements of domestic market interventions, the Governor of the State Bank shall request the Prime Minister to allow the transfer of foreign exchange from the foreign exchange reserve Fund to does not meet requirements of domestic market interventions, the Governor of the State Bank the Prime Minister to allow transfer of foreign exchange from foreign exchange reserve Fund to the exchange rate stabilization and gold market management Fund.

Decree No. 50/2014/ND-CP stipulates that the exchange rate stabilization and gold market management Fund is used for:

1. Intervention in domestic market of foreign currencies and gold;

2. Investment on international market, except for activities of investment trust;

3. Implementation of operations of foreign exchange derivatives;

4. Transfer and swap of foreign exchange with the foreign exchange reserve Fund

5. Sale or advance of foreign currencies for foreign exchange demands arising from the operations and management of the State Bank;

6. Sale of foreign currencies to the State budget under the plan for balance of foreign currencies approved.

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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