On August 30, 2024, the Governor of the State Bank of Vietnam issued Circular No. 44/2024/TT-NHNN amending Clause 2, Article 2 of Circular No. 16/2019/TT-NHNN regarding the issuance of State Bank treasury bills.
The amendment modifies and supplements Clause 2, Article 2 of Circular No. 16/2019/TT-NHNN concerning the subjects to which it applies as follows:
Commercial banks, foreign bank branches, general finance companies, specialized finance companies, cooperative banks, and policy banks (hereinafter referred to as credit institutions).
Thus, the subjects applicable to the Circular on the issuance of State Bank treasury bills from October 23, 2024, include:
- The State Bank of Vietnam.
- Commercial banks, foreign bank branches, general finance companies, specialized finance companies, cooperative banks, and policy banks (hereinafter referred to as credit institutions).
- Vietnam Deposit Insurance.
Method of Issuing State Bank Treasury Bills
The method of issuing State Bank treasury bills is regulated under Article 6 of Circular No. 16/2019/TT-NHNN as follows:
- Treasury bills are issued either through an auction method or a mandatory method.
- Auction Method: The issuance of State Bank treasury bills via the auction method is conducted according to the State Bank's regulations on open market operations.
- Mandatory Method:
+ Based on monetary policy objectives for each period and the actual situation, the State Bank decides to issue treasury bills using the mandatory method for credit institutions. Credit institutions are required to purchase State Bank treasury bills issued under the mandatory method according to the Governor’s Decision.
+ If necessary, the State Bank may consider repurchasing State Bank treasury bills issued under the mandatory method before maturity. The Governor of the State Bank decides on the repurchase of treasury bills issued under the mandatory method.
The Circular will take effect from October 23, 2024.
