THE STATE BANK OF VIETNAM
SOCIALIST REPUBLIC OF VIETNAM
Hanoi, May 28, 2004
ON THE AMENDMENT, SUPPLEMENT OF SEVERAL ARTICLES OF THE DECISION NO. 679/2002/QD-NHNN OF THE STATE BANK'S GOVERNOR DATED 1 JULY, 2002 ON THE ISSUANCE OF SEVERAL REGULATIONS RELATING TO FOREIGN CURRENCY TRANSACTIONS OF CREDIT INSTITUTIONS, WHICH ARE PERMITTED TO ENGAGE IN FOREIGN EXCHANGE ACTIVITY.
THE GOVEROR OF THE STATE BANK
- Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated 12 December, 1997, the Law on the amendment, supplement of several Articles of the Law on the State Bank of Vietnam No. 10/2003/QH11 dated 17 June, 2003 and the Law on Credit Institutions No. 02/1997/QH10 dated 12 December, 1997;
- Pursuant to the Decree No. 86/2002/ND-CP dated 5 November, 2002 of the Government providing for assignment, authority, responsibility for the State management of Ministries, ministerial -level agency.
- Upon the request of the Director of the Foreign exchange control Department.
Article 1. To amend, supplement several articles of the Decision No. 679/2002/QD-NHNN of the State Bank's Governor dated 1 July, 2002 on the issuance of several regulations relating to foreign currency transactions of Credit Institutions, which are permitted to engage in foreign currency business as follows:
1. Article 2 shall be amended, supplemented as follows:
"Article 2. The term of forward, swap transactions
2. The term of forward, swap transactions between foreign currencies shall be agreed upon by credit institutions, which are permitted to engage in foreign exchange activity, and their customers"
2. Article 3 shall be amended, supplemented as follows:
"Article 3. Principle for the determination of forward rates in forward, swap transactions
1. Credit Institutions permitted to engage in foreign exchange activity and their customers shall agree on the forward rate for transactions between VND and USD. This forward rate shall not be permitted to exceed the level, which is determined on the basis of: (i) the spot rate on the signing date of the forward, swap contract; (ii) the difference between the two levels of current interest rates, which are the base interest rate in VND (on annual basis) announced by the State Bank of Vietnam and the target interest rate in USD announced by the American Federal Reserve Department (Fed Funds Target Rate); and (iii) the term of the contract.
2. The forward rate between VND and other foreign currencies (except for USD) and the rate between foreign currencies shall be agreed upon by the General Director (Director) of Credit Institutions permitted to engage in foreign exchange activity and their customers."
Article 2. This Decision shall be effective after 15 (fifteen) days from its publication in the Official Gazette. Previous provisions, which are in contrary to provisions in this Decision, shall be repealed.
Forward, swap contracts entered into prior to the effectiveness of this Decision shall be performed in accordance with provisions of the laws at the date where those contracts were entered into.
Article 3. Director of the Administrative Department, Director of the Foreign exchange control Department, Head of relevant units of the State Bank Head-office, General managers of the State Bank branches in provinces, cities under the central Government's management, Chairperson of the Board of Directors and General Director (Director) of Credit Institutions, which are permitted to engage in foreign exchange activity shall be responsible for the implementation of this Decision.
FOR THE GOVERNOR OF THE STATE BANK
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