The State Bank of Vietnam (SBV) is collecting feedback on a draft circular that will, among other things, allow non-residents legally present in Vietnam to make term deposits in both VND and foreign currencies.
Headquarters of the State Bank of
Vietnam in Hanoi (Photo: SBV)
The central bank argues that the
permission is a measure to prevent "hot money flows,” or flow of funds from one
country to another to earn short-term profit on interest
rates differences, from entering the exchange market. It is also a way to
ensure the legal rights of non-residents present in the country, it said.
The draft, released on July 4, has thus far received positive feedback from
commercial banks and other credit institutions. Directors at a majority of the
banks consider the circular a significant improvement over previous
regulations, the SBV has reported. They said the new rules can help attract
another source of capital and utilise idle capital from expatriates working in
Vietnam.
Furthermore, by allowing foreigners to switch from using a current account in
VND or foreign currency to using term deposits, authorities will also find
it much easier to control the flow of capital from this group.
It is hoped that with interest rates on deposits in foreign currencies at
zero percent, the five to eight percent interest rates for deposits in VND will
motivate more people to deposit their savings in the local currency.
The central bank said that previously, non-resident foreigners in Vietnam were
only allowed to open current accounts in VND or foreign currencies, so the new
circular will also help advance the government’s aim to move towards a national
cashless payment system, and better control foreign currency flows.
The draft circular defines non residents as individuals present in Vietnam
for 12 months or less, who are currently working, undergoing medical treatment,
travelling for recreational purposes, or any employees of foreign embassies,
organisations and companies in Vietnam regardless of time limit.
At present, the SBV is trying to alleviate pressure on interest rates by
increasing liquidity in the money market.
This has happened because the central bank has purchased more foreign
currencies to increase its reserves, according to a second quarter report by
the Vietnam Institute for Economic and Policy Research (VEPR).
Source:VNA
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Situated at the gateway to the Northwest, Hoa Binh province has a population of over 900,000, including about 540,000 of working age. It is home to 6,000 businesses and production facilities, providing employment for over 100,000 workers. The remaining workforce is engaged in informal jobs, works in enterprises outside the province, or contributes to agro-forestry-fisheries. Additionally, around 3,000 workers are employed abroad.
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The cultivation of Dam Xanh fish (Bangana lemassoni), a unique fish species, has seen remarkable growth in Mai Chau district, thanks to its high economic value and effectiveness. Initially concentrated in Van Mai commune, farming has now extended to four other communes, namely Mai Hich, Mai Ha, Chieng Chau, and Son Thuy. These areas benefit from pristine underground water flowing from mountain crevices, providing ideal conditions for raising this specialty fish.
In 2024, the total state budget revenue of Hoa Binh Province is estimated at approximately VND 6,930 billion, achieving 183% of the Government’s target, 126% of the target assigned by the Provincial People's Council, and 145% compared to the same period last year.
In 2024, Hoa Binh province has shown signs of improvement in attracting investment and developing enterprises.
