Foreign exchange arrangements and fund transfers in Viet Nam

Viet Nam took a major step at the end of 2005 by accepting the obligations of International Monetary
Fund (IMF) article VIII, which bans exotic put back restrictions for current international transactions, as
well as multiple or discriminatory currency formations. The 2005 Ordinance on Foreign Exchange
obligate clearly stipulates that all transactions being payments and remittances of money relating to
current transactions between residents and non-residents shall be conducted freely.
The State Bank of Viet Nam (SBV) publishes perfunctory average transmute locates against the dollar and
allows outside(prenominal) deputise traders to quote spot rates that vary at nearly by 1 per cent on either side. SBV
has hold a very stable commutation rate against the dollar, as the annual nominal depreciation of the
dong against the dollar has non exceeded 1 per cent per year since 2004. This led the IMF to re-classify
Viet Nams exchange rate regime in the category of conventional pegged arrangement from managed
floating with no predetermined path.
The Government indicated to IMF that it planned to throw the dong fully convertible by 2010.



At the
windup of the article IV consultations in November 2006, the IMF Board encouraged the Government
to facilitate of the strength of the external position to move towards greater exchange rate flexibility, which
would serve to cushion the economy from external shocks and nurture better management of exchange
rate risks.61 In the medium term, SBV willing need to strengthen its capacity in exchange rate management
as capital flows atomic number 18 further liberalized and full convertibility is introduced.
Residents are allowed to open foreign currency accounts. Exporters, in turn, are compulsory to remit
all foreign currency earnings into a foreign currency account with an authorized credit institution in
Viet Nam. Retaining foreign currency earnings overseas is possible only upon commendation from SBV.
Capital transactions remain more strictly...If you want to stimulate a full essay, order it on our website: Ordercustompaper.com



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