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Vietnam's central bank tightens rules for foreign currency loans

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Vietnam's central bank tightens rules for foreign currency loans

The State Bankof Vietnam tightened rules for foreign currency loans issued by domesticbanks, Viet Nam News reported March 31,citing a circular from the central bank.

Vietnamese banks will not be allowed to issue foreign currencyloans to exporters, except for offshore payments. The central bank now also prohibitsthe issuance of short-term foreign currency loans for exports through the country'sborder gates.

However, banks will still be able to issue foreign currency loansto exporters capable of generating enough foreign currency revenue.

Banks can also still issue short-term foreign currency loansto major petroleum importers with import quotas assigned by the Ministry of Industryand Trade. Banks can make foreign currency loans for overseas investment in keynational projects and programs approved by the National Assembly, the governmentor the prime minister. To be eligible for foreign currency loans, overseas investmentplans must be certified by the Ministry of Planning and Investment as well.