Local exporters will still be able to take out forex loans for business
activities instead of being subject to an earlier decision by the central bank
stopping forex loans from tomorrow, according to a new circular.
Under Circular 37/2012/TT-NHNN
just issued by the State Bank of Vietnam, credit institutions are allowed to
provide short-term forex loans to companies having foreign currency income from
exports to carry out business and production plans. However, exporters
borrowing money in foreign currency will have to sell the amount to the
lenders.
“Corporate borrowers have to sell
the disbursed loan to lenders at the spot price,” the circular which will be
effective until the end of 2013 clarifies.
Besides, the new rule also
regulates that credit institutions are allowed to consider lending foreign
currency to those in need of short-term, middle-term and long-term loans for
commodities and services payments for foreign partners. It rules that borrowers
must have enough revenue in foreign currency to repay the loans.
At the same time, local banks are
requested to provide short-term loans to fuel wholesalers that the Ministry of
Industry and Trade has allocated the 2013 quotas when these enterprises need
foreign currency to pay foreign partners for imported fuel. The regulation will
also be applicable until December 31, 2013.
The law specifies that local
lenders are permitted to lend to key national projects and works that the
National Assembly, the Government or the Prime Minister agrees to make
investment. The target borrowers also include project owners of schemes that
receive outbound investment licenses from the Ministry of Planning and
Investment.
For other capital demand
belonging to the priority areas in line with the orientation of the Government,
local banks can provide loans in foreign currency upon approval from the
central bank in accordance with the circular’s regulations.
The circular will take effect
from tomorrow and will replace Circular 03/TT-NHNN dated March 8, 2012 by the
central bank governor on giving foreign currency loans to residential
borrowers.
The Vietnam Association of
Seafood Exporters and Producers earlier had proposed the central bank allow its
members to continue to borrow foreign currency loans since the loan rates are
much lower than those of loans in Vietnam dong. The new circular is seen a
reply from the central bank.
At present, lending rates of the
U.S. dollar stays at 6-7% annually, while Vietnam dong loan rates applicable to
entities of prioritized areas are some 12%, according to a decision from last
Monday.
The stability of foreign exchange
rates in 2012 is one of the main reasons for the fact that many companies
continue to take out foreign currency loans. The Vietnam dong/U.S. dollar
exchange rate has mainly fluctuated between VND20,850 and VND21,000 this year
while the average inter-bank rate has remained unchanged, at VND20,828 to the
dollar.
Deputy Governor Le Minh Hung
predicts foreign exchange rates to continue to be stable next year.
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at christian.siodmak@gmail.com. Many thanks.
No comments:
Post a Comment