Forward forex trades for individuals
The State Bank of Vietnam has recently issued Decision 1452/2004/QD-NHNN concerning forex transactions of credit organisations. Accordingly, for the first time individuals are allowed to make foreign exchange forward and option transactions with banks.
Individuals who have income sources in foreign currencies in the future can sell foreign currencies to commercial banks under forward contracts, that is, to predetermine prices and to sell currencies at a future date (more than two trading days). Those who wish to use foreign currencies for medical treatment, overseas study, or market survey and so on in foreign countries are entitled to buy foreign currency options to predetermine price in order to minimise risks when the forex rate between dong and foreign currencies increase in the future.
Option allows individuals and organisations to have the right but not the obligations to implement a foreign exchange trading contract within a certain time in the future depending their interests.
