Credit institutions and foreign bank branches will be allowed to continue providing enterprises with short-term loans in foreign currency till the end of 2017.
This is provided in Circular No. 31 issued by the State Bank of Vietnam on November 17, 2016, to replace Circular No. 07 of May 2016, which only allowed credit institutions to offer such loans through December 31, 2016.
Under Circular No. 31, credit institutions may consider providing resident borrowers with foreign currency loans to meet short-term capital needs for producing and trading in goods exported via Vietnam’s border gates. In this case, the borrowers must have sufficient foreign-currency revenues from export to repay the loans.
After getting the foreign currency loans, borrowers must immediately sell such loans to the lenders through a foreign exchange spot transaction, except cases in which the payment is required by law to be made in foreign currency.
This Circular will take effect on January 1, 2017.- (VLLF)