Global Trade Alert

 On 8 March 2012, State Bank of Vietnam (SBV) issued Circular No. 03/2012/TT-NHNN further restricting foreign currency lending by domestic credit institutions and foreign bank's branches to resident borrowers. This measure replaces an earlier measure 07/2011/TT-NHNN (see related measure).
 
This Ciruclar restricts foreign currency lending to - 

• short, medium or long-term loans to make payments to overseas parties for purchase of goods and services, provided they can demonstrate the ability to pay back from foreign currency revenues
• for other purposes such as 

1. short term loans for overseas payemnts for import of petrol as approved by the SBV Governor
2. other loans will be approved by the SBV Governor for each specific case on the request of the credit institution and considering (i) the conformity of the project for which the foreign currency loan is demanded with the priortized areas set by the Government for investments and (ii) the evaluations by the credit institutions of the proposed projects and the ability of the borrower to meet the lending requirements as required by the law at that time.

The Circular takes effect from 2 May 2012.