Headlines 15/01/2022 11:34 SA

Types of foreign currency transaction between State Bank and Credit Institution authorized to make foreign currency transaction

Quý Tân

This content is mentioned in Circular No. 26/2021/TT-NHNN on guidelines for foreign currency transaction between State Bank and Credit Institution authorized to make foreign currency transaction.

According to the Circular, types of foreign currency transaction between State Bank and Credit Institution authorized to make foreign currency transaction includes:

- “Foreign exchange spot transaction” (FX spot)

- “Foreign exchange forward” (FX forward)

- “Currency swap”

- “Call option or put option transaction” (FX option transaction)

- Other types of transaction that are decided by the State Bank from time to time.

FX option is a new type of transactions

FX option transaction means a transaction between two parties in which the buyer pays the seller a price for the option but not the obligation to buy or sell a currency for another within a period of time agreed by both parties at an exchange rate determined at the transaction time and the payment is made on a later date.

If the buyer opts to exercise their call option, the seller has the obligation to sell currency accordingly. In FX option transactions, the put option for one currency is also the call option for another currency.

Circular No. 26/2021/TT-NHNN takes effect from February 15, 2022 and supersedes Circular No. 02/2012/TT-NHNN dated February 27, 2012, Circular No. 27/2013/TT-NHNN dated December 05, 2013 and Circular No. 45/2014/TT-NHNN dated December 29, 2014.

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