Amendment to regulations on foreign currency trade between official foreign exchange reserves and the State Budget of Vietnam

Amendment to regulations on foreign currency trade between official foreign exchange reserves and the State Budget of Vietnam
Lê Trương Quốc Đạt

Governor of the State Bank of Vietnam promulgates Circular 43/2024/TT-NHNN dated August 09, 2024, amending Circular 01/2014/TT-NHNN guiding the organization and implementation of state foreign exchange reserve management activities.

Amendment to regulations on foreign currency trade between official foreign exchange reserves and the State Budget of Vietnam

Circular 43/2024/TT-NHNN has amended and supplemented Article 9 of Circular 01/2014/TT-NHNN regarding the foreign currency trade between official foreign exchange reserves and the State Budget of Vietnam as follows:

- Purchase of foreign currency from the state budget:

Based on the annual foreign currency sale plan of the state budget and the written request for foreign currency sale from the Ministry of Finance and/or directives from the Prime Minister of the Government of Vietnam, the State Foreign Exchange Reserve Management Department shall purchase foreign currency to supplement the state foreign exchange reserves from the state budget at the exchange rate specified in Clause 3, Article 9 of Circular 01/2014/TT-NHNN (as amended in Circular 43/2024/TT-NHNN).

- Sale of foreign currency to the state budget:

+ Based on the written request for foreign currency purchase from the Ministry of Finance to meet the foreign currency needs of the state budget, the State Foreign Exchange Reserve Management Department shall cooperate with the Department of Monetary Policy to formulate a plan for balancing the sale of foreign currency to the state budget which will be submitted to the Governor for approval and notification to the Ministry of Finance;

+ Based on the foreign currency sale balance plan approved by the Governor, the State Foreign Exchange Reserve Management Department shall carry out the sale of foreign currency to the state budget at the exchange rate specified in Clause 3, Article 9 of Circular 01/2014/TT-NHNN (as amended in Circular 43/2024/TT-NHNN).

- Exchange rates for foreign currency purchase and sale by the State Bank:

+ In the case of buying and selling US dollars, the buying exchange rate and the selling exchange rate of foreign currency shall be the spot exchange rates in the intervention plan; if at the time of implementation there is no intervention plan or the intervention plan does not include spot exchange rates, the buying exchange rate and the selling exchange rate of foreign currency shall be the central exchange rate announced by the State Bank applied on the transaction date;

+ In the case of buying and selling foreign currencies other than US dollars, the buying exchange rate and the selling exchange rate of foreign currency shall be applied based on the cross exchange rates determined at point a, clause 3, Article 9 of Circular 01/2014/TT-NHNN (as amended in Circular 43/2024/TT-NHNN) and the average exchange rate of the buying and selling prices between the foreign currency to be bought or sold and the US dollar listed on the international foreign exchange market through the Refinitiv or Bloomberg information network system before 10 a.m. on the transaction day.

More details can be found in Circular 43/2024/TT-NHNN which comes into force in Vietnam from September 23, 2024.

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