4 Jan 2018
VIETNAM: Foreign Currency Loan Scheme for Exporters Extended Until December 2018
The scheme to entitle Vietnam-based exporters to foreign currency denominated loans has now been extended until 31 December 2018 from the end of 2017 previously. The State Bank of Vietnam, which manages the scheme, allows commercial banks to extend short term loans in overseas currency to export companies which earn in foreign currency.
Exporters are required to convert the borrowed amount into local currency through their respective lending institutions, though a part of the foreign currency can be retained for making payments to overseas suppliers.
The scheme’s extension comes as part of the Vietnamese government’s efforts to give an extra boost to the export-oriented businesses. At present, interest rates for short-term US dollar denominated loans offered by commercial banks in Vietnam are in the range of 2.5% to 4%, whereas borrowings in VND, the local currency, attract higher interest rates between 7% and 9%.