Emerging Markets Rates and Currencies Handbook

Vietnam (VND - Vietnamese Dong) Citi in Vietnam Citi set its first footprint into Vietnam before 1975, and then started up a representative office in Hanoi in 1993. A year later, Citi became the first U.S financial institution licensed for branch opening and full branch establishment in Hanoi. In 1998, Citi opened the second branch in Ho Chi Minh City. Over the past years, the total headcount has strongly grown from around 10 to over 800 in both offices. Currently, the bank offers a wide array of banking and financial services including Banking, Capital markets and Advisory; Treasury and Trade solution services; Commercial banking; Consumer banking, Markets and Securities services. Market Overview The State Bank of Vietnam (SBV) maintains strict currency controls and manages the VND tightly. USD is traded against VND within the trading band set by SBV. The current stipulated trading band of +/- 5% (effective from 17th October 2022) is applied on the daily official rate published by SBV. Most FX transactions must be conducted onshore. Almost all payments made in Vietnam must be in VND, except for a limited number of transaction types allowed in FCY as per SBV’s regulations. SBV allows Forward Rate Agreement (FRA), Interest Rate Swap (IRS), Cross-Currency Swap (CCS), Interest Rate Options (cap, floor and collar) for hedging purpose only. Parties provide supporting documents to prove genuine purposes. Convertibility Supporting documents are required for the purchase of foreign currencies (FCY) against VND and against other FCY. No supporting document is required for selling the FCY against VND under trade flows. 59