The new circular supplements the needs which justify dollar loans from banks to fund investment projects, business projects, goods trading and export services. However, if enterprises borrow dollars for use in the country, they must sell dollars to lenders who offer the loans, says the document.
That means that if enterprises want to borrow dollars at low lending rates, about 7% per year compared to 12% for Vietnam dong, they must sell back to lenders to take Vietnam dong capital for payment purposes in the country. For dollar demand which is not regulated in the circular, borrowers must have approval from the Governor before borrowing dollars.
According to a statement on the central bank’s website, the supplement aims to balance supply and demand of U.S. dollars to suit the Government’s policy to stabilize the foreign exchange market.
In April last year, the central bank published a circular saying that to avoid dollarization, only importers who had demand to buy goods from foreign countries could borrow dollars at banks. Recently, many experts have suggested the central bank let exporters borrow dollars in order to reduce buying demand on the dollar with exporters selling dollars to banks later, helping to increase the dollar supply at banks.
However, some exporters say they have been permitted to borrow dollars from banks. One deputy general director of a joint-stock bank said that in fact, banks had given loans in U.S. dollars to exporters for a long time via the method of lending Vietnam dong at U.S. dollar rates.
That means banks sell the amount of dollars demanded by enterprises to take Vietnam dong and lend to exporters at the dollar rate, then exporters with income in dollars sell back to banks. The new circular legalizes this method, the source says.
A deputy general director of another bank said that most banks preferred giving dollar loans to exporters rather than importers because exporters had revenue in dollars while importers did not. “Giving loans in dollars to importers, banks are afraid they will not have enough dollars to provide enterprises for debt payments later,” he said. He raised the concern that lenders later would give priority to giving loans in U.S. dollars to exporters.