Exporters would no longer be subject to restrictions on borrowing of foreign-currency loans, while importers would face harder conditions if wishing to do so.
This is a surprise change proposed by the State Bank of Vietnam (SBV) in a draft circular revising Circular 24 of 2015 on provision of foreign-currency loans by credit institutions and foreign bank branches to resident borrowers.
Under Circular 24, exporters are listed among subjects restricted from borrowing foreign-currency loans. In Circular 18 of 2017, the central bank requested banks to liquidate all foreign-currency loans provided to clients being export producers and traders by the end of this year.
Before the draft paper is released, the industry insiders and even exporters did not expect the SBV to remove restrictions on these subjects’ access to foreign-currency loans but just predicted that the central bank would extend the time limit for liquidation of exporters’ foreign-currency loans for another one year after it has been extended time and again since Circular 24 is issued.
As for importers, the draft says that importers may borrow from banks short-term foreign-currency loans to pay for goods and services imported for the domestic market by the end of March 31, 2019. For those wishing to borrow medium- and long-term loans, the deadline is September 30, 2019. After that, exporters would have to seek foreign-currency supplies from other sources.
As explained by the SBV, such move would help redress dollarization of the economy and, at the same time, boost exports and restrict imports, thus exerting positive impacts on trade balance, contributing to controlling exchange rates and stabilizing the macro-economy.