Facing with run-away inflation and regular devaluation, Vietnamese businesses and individuals usually denominate contract price in US$ with actual payment made in VND. Ten years ago, the SBV seemed to be agreeable with that practice. This is evidenced by Resolution 4/2003 of the Supreme Court which reflects an official letter from the SBV to the Supreme Court.

For the last three years, however, the SBV has taken stricter stance on price denomination in US$. In particular, the SBV indicated in an internal letter addressed to one of its branches in Vietnam in December 2010 that all transactions, payments, price quotation, advertisement, etc., must not be denominated in foreign currencies either directly or indirectly.

Such stricter stance is now formally codified in the new amendment to the current Ordinance on Foreign Exchange which takes effect from 1 January 2014. In particular,

• Currently, the restrictions apply to “all transactions, payments, price listings and advertisements” within the territory of Vietnam. Under new the amendment, the restrictions apply to “all transactions, payment, price listing, advertisement, price quoting, price denomination, price written in a contract, agreement and other similar methods.”; and
• Currently, the restrictions do not apply to “transactions with credit institutions and payments made via intermediaries, including authorized collection, entrustment, agency”. Such exceptions are now removed which even indicates that under the new amendment credit institutions may not be able to receive saving deposits in US$ from individuals unless otherwise permitted by the SBV.  

The exact wording of the new restrictions is:

“Within the territory of Vietnam, all transactions, payment, price listing, advertisement, price quoting, price denomination, price written in a contract, agreement and other similar methods by residents or non-resident must not be effected in foreign exchange currency except as permitted by the State Bank of Vietnam.”