No Provision of State Budget to Cover Temporary Treasury Shortfalls

- The temporary shortfall in the state budget is compensated by: Issuing Treasury bills (TPKB) and the early recovery of term deposits at commercial banks.

- The borrowed amount to compensate for the temporary shortfall in the state budget is accounted for separately and is not included in the state budget deficit (NSNN).

The interest payments for borrowing to compensate for the temporary shortfall in the state budget are included in the operational expenditure for the management of the state treasury. The state budget (NSNN) does not fund this interest payment.

- The issuance of TPKB to compensate for the temporary shortfall in the state treasury has maximum terms not exceeding 03 months and the procedures, issuance process of TPKB follows the current regulations on issuing bonds of the Government of Vietnam. Specifically:

+ All the proceeds from the issuance of TPKB are used to ensure the liquidity of the State Treasury (KBNN).

+ The KBNN manages and uses the proceeds from the issuance of TPKB to compensate for the temporary shortfall in the state treasury, arranging resources to fully and timely repay the debt (principal, interest).

+ The expenditures incurred during the process of issuing and paying TPKB are operational expenses for managing the state treasury, with the payment fee rate according to the bidding fee rate for TPKB through the State Bank of Vietnam.

Decree 24/2016/ND-CP takes effect from January 1, 2017.

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