Payments in Chinese yuan fail in Vietnam

10-Jan-2015 Intellasia | Infonet | 6:00 AM Print This Post

Regarding the proposal to expand payment in the official currency of the People’s Republic of China renminbi (RMB) in Vietnam by China Business Association and Industrial and Commercial Bank of China, Nguyen Hoang Minh, deputy director of the State Bank of Vietnam, the HCM City branch confirms that following the roadmap on anti-dollarisation, only dong is used in the territory.

Minh says, RMB is not a freely convertible currency like USD, euro, GPB so the proposal of the Association in terms of payment goes against the requirement on payment in VND. Normally, import and export payments also use these three strong currencies.

To facilitate Chinese banks operating in Vietnam, at the end of 2010, SBV granted license for Bank of China to carry out the pilot model of RMB exchange in HCM City. Therefore, the RMB with legal origin could be converted into dong or vice versa.

However, after two years of implementation, at the end of 2012, this agent had to close due to inefficiency and not many people came to exchange.

Meanwhile, to carry out this profession, the RMB agent is required to invest a lot in equipment, personnel, infrastructure, etc.

Besides, when going to China, Vietnamese people often exchange VND into USD and change it into RMB again after arriving in the country. For example, a student studying in China has to purchase USD and sell it in China to get RMB for spending.

Currently, the rate of RMB payment via the banking system is very small, banks even do not have statistics about it as it is not a convertible currency and only arises in branches of Chinese banks.

Vietnam’s trade deficit with China in 2014 is also converted into dollars (nearly $29 billion) but not in RMB.

The reality proves that it is very hard to use RMB as a means of payment in Vietnam.


Category: Finance, Vietnam

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