The Circular 44 amends and supplements Clause 2, Article 2 of Circular 16/2019/TT-NHNN on subjects of application as follows: commercial banks, branches of foreign banks, financial companies, specialized financial companies, cooperative banks, and policy banks (hereinafter referred to as credit institutions). Thus, the subjects of application for the issuance of central bank bills include: The State Bank of Vietnam; commercial banks, branches of foreign banks, financial companies, specialized financial companies, cooperative banks, and policy banks (hereinafter referred to as credit institutions); and Vietnam Deposit Insurance.
The method of issuing central bank bills remains as stipulated in Article 6 of Circular 16. Specifically, central bank bills are issued through auction or compulsory methods.
Regarding the auction method, the issuance of central bank bills shall comply with the regulations of the State Bank on auction through open market operations.
For the compulsory issuance method, based on monetary policy objectives in each period and practical situations, the State Bank decides to issue central bank bills compulsorily to credit institutions. Credit institutions must purchase central bank bills issued through the compulsory method according to the Governor of the State Bank’s decision. If necessary, the State Bank may consider repurchasing central bank bills issued through the compulsory method before their maturity. The Governor of the State Bank decides on the repurchase of central bank bills issued through the compulsory method.
Circular 44 takes effect from October 23, 2024.
The Art of Refining State Treasury Securities Issuance
The credit institution is mandated to purchase the treasury bills issued by the State Bank, as per the directive of the Governor of the State Bank.
