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.
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