Vietnam limits foreign currency loans to curb inflation

Mar 25, 2011. Vietnam’s central bank instructed banks to limit foreign currency loans as of May 6 as part of government efforts to curb inflation, according to a statement on its website today.

Credit institutions will be allowed to make short-, medium- and long-term foreign currency loans to businesses to settle import contracts, the State Bank of Vietnam said in the statement. In this case, companies will have to have foreign currency resources to repay banks, it said.

Banks are also allowed to grant short-term foreign currency loans for exports, according to the statement. In order to get the loans, companies will have to ensure sufficient foreign currency holdings from exports to repay loans. Others loans demand will require documented approval from the central bank’s governor, according to the statement.

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