Due to the fluctuations of Vietnam Dong (VND), house owners prefer to sign house contract with tenants in USD so that they would not suffer from VND devaluation. On January 4, 2016 the State Bank of Vietnam reduced the Vietnamese dong reference rate against the US dollar by 0.03% to VND21,896/USD for the first time since August 2015.
BMI Research (A FitchGroup Company) forecast the Vietnamese dong to weaken to VND23,100/USD by end-2016, and VND24,000/USD by end-2017.
However, according to Vietnamese law (Article 6 — Decree No.56): The rent rate and the value of the rent written in the contract shall be calculated in Vietnamese Dong and shall be converted into US dollars or another convertible currency at the exchange rate announced by the Vietnam State Bank at the time of the signing of the contract.
Therefore, the advice for any foreigner before entering the lease contract is that make sure it’s legal in terms of currency used for payment. If the rent rate is already in VND, there’s nothing to worry about. If the rent rate is quoted in USD, make sure to check the selling rate announced on Vietnam State Bank (Techcombank or Vietcombank are also fine) and have it included as fixed rate in the contract.
Many expats have been struggling and are always on the fence on the exchange issue, we hope that now you are not one of them.
