Which foreign currencies are allowed for investment in foreign exchange reserves?

According to Article 7 of Decree No. 50/2014/ND-CP of Vietnam’s Government, foreign currencies allowed for investment in State foreign exchange reserves are freely convertible foreign currencies and other foreign currencies committed in the bilateral or multi-lateral currency swap agreements signed by the Central Banks and international financial institutions.

Besides, Decree No. 50/2014/ND-CP stipulates components of State foreign exchange reserves, including:

- Foreign currencies, cash and deposits in foreign currencies abroad;

- Securities and other valuable papers in foreign currencies issued by the Government, foreign or international institutes;

- Special capital or reserve withdrawal rights at the International Monetary Fund;

- Gold managed by the State Bank;

- Other types of State foreign exchange.

There are 04 sources of State foreign exchange reserves, including: Foreign exchange purchased from the State budget and foreign exchange market; Foreign exchange from loans of banks and international financial institutions; Foreign exchange from deposits in foreign currencies of the State Treasury and credits institutions; Foreign exchange purchased from the profitability from the investment in state foreign exchange reserves; Foreign exchange from other sources.

Every 6 months, and when necessary, the Governor of the State Bank shall decide to approve the structure, criteria and investment quota of State foreign exchange reserves and make a report to the Prime Minister and the Ministry of Finance for coordination.

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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