Under Circular 31/2016/TT-NHNN dated November 17, 2016, which will remain in effect until December 31 this year, commercial banks can provide short-term loans in foreign currency for export firms which need funds for production and has turnover in foreign currencies. After getting the loans, exporters must immediately sell the amount of foreign currency borrowed to the lending institutions under the spot forex trading method, except in case the foreign currency will be used to make payments.
Thanks to the policy, exporters have an opportunity to borrow foreign currencies at low interest rates. Currently, lending interest rates for short-term US dollar loans are roughly 2.5-4 per cent, while the rate for short-term đồng loans is some 7-9 per cent.

Thanks to the foreign currency lending policy, exporters have an opportunity to be access to credit at low interest rates.

The policy is aimed to support local exporters to enhance their competitiveness and boost exports in the context that their business and production still face difficulties. It is also among the Government’s incentive policies aimed to support and develop local enterprises until 2020, which was approved in Decree 35/NQ-CP issued in May 2016.
Previously, the policy had been extended several times to support local exporters.
While exporters are still waiting for the movement from the SBV, SBV deputy governor Dao Minh Tu has recently said that the central bank wanted to stop the policy many times but having to extend it to support local firms.
He admitted though some exporters should be given priority to take the advantage of the policy, some others, whose turnover in foreign currencies is very modest, should not but still enjoying it, causing unfairness.
In the short run, SBV therefore might stop the policy for some unqualified firms, Tu revealed, adding that in the long run, the policy will stop for all firms and all firms must gradually shift from borrowing to buying/selling foreign currencies.
However, in contrast to Tu’s opinion, general director of a commercial bank, who declined to be named, was concerned that unqualified firms will try their best to break the loophole to enjoy the policy. Therefore, the target of ensuring business fairness as desired by the central bank would be impossible, he said.
Huynh Nhat Trung, director of an agricultural product export company in the central province of Binh Thuan, said as local exporters still have to depend significantly on bank loans, which interest rate in dong is twice or even triple that of foreign currency, it will take them difficult to cut the interest costs without the policy. This will led to the fact that Vietnamese goods are unlikely to compete with rivals in the region, he said.
Financial and banking expert Nguyen Tri Hieu proposed the central bank to extend the policy for an additional one year to avoid disadvantage for the country’s exports. He believed that the extension will not impact on the Government’s anti-dollarization policy as the foreign exchange is relatively stable. Besides, the disbursement of the foreign currency loans is in the dong but not the greenback.
To avoid unqualified firms to enjoy the policy, Hieu suggested that the central bank could detail the regulation. For example, only firms those with at least 50 per cent of turnover in foreign currency are allowed to enjoy the policy. 
Echoing Hieu, expert Can Van Luc proposed that to make the final and suitable decision on whether to extend the policy or not, the central bank should conduct a survey on credit institutions and business community about the issue.
The Government should pursue the anti-dollarization policy but should not do it at all costs, Luc said, adding that it should fight against the dollarization but at the same time should still creating conditions to support firms, especially exporters.