Một số giải pháp hạn chế rủi ro tỷ giá đối với doanh nghiệp vay vốn tại ngân hàng tmcp đầu tư và phát triển việt nam chi nhánh sở giao dịch 1

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - TRƯƠNG QUỐC DƯƠNG SOME SOLUTIONS TO TACKLE RISK OF CHANGES IN EXCHANGE RATE FOR ENTERPRISES BORROWING JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAMAT SO GIAO DICH BRANCH MỘT SỐ GIẢI PHÁP HẠN CHẾ RỦI RO TỶ GIÁ ĐỐI VỚI DOANH NGHIỆP VAY VỐN TẠI NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM – CHI NHÁNH SỞ GIAO DỊCH LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2018 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - TRƯƠNG QUỐC DƯƠNG SOME SOLUTIONS TO TACKLE RISK OF CHANGES IN EXCHANGE RATE FOR ENTERPRISES BORROWING JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAMAT SO GIAO DICH BRANCH MỘT SỐ GIẢI PHÁP HẠN CHẾ RỦI RO TỶ GIÁ ĐỐI VỚI DOANH NGHIỆP VAY VỐN TẠI NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM – CHI NHÁNH SỞ GIAO DỊCH Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: TS NGUYỄN THỊ KIM Hà Nội - 2018 DECLARATION The author confirms that the research outcome in the thesis is the result of author’s independent work during study and research period and it is not yet published in other’s research and article The other’s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration Date …./01/2018 ACKNOWLEDGEMENT “During the process of fulfilling this master’s thesis, I have received many necessary assistances First of all, I would like to express my sincere thanks to Ms.Nguyen Thi Kim Oanh PhD, the supervisor of this research, who has created favorable conditions, instructed and helped enthusiastically as well as responsibly to me during the thesis Secondly, I also appreciate the teachers in Hanoi School Of Business And Management – Vietnam National University, the scientists, the authors of scientific papers helping me complete this essay” TABLE OF CONTENTSS TABLE OF CONTENTSS LIST OF TABLES ii LIST OF CHARTS AND FIGURES iii INTRODUCTION 1 Rationale of the study Research overview Research objectives 3.1 General objective 3.2 Specific objectives Research object 5 Research scope Research methods Organization of the thesis Chapter 1: Theoretical framework on exchange rate risk and reduction of exchange rate risk for corporate borrowers at commercial banks 1.1 Overview of exchange rate risk 1.1.1 Concept 1.1.2 Influence of exchange rate risk 1.1.3 Classification of exchange rate risk 1.2 Reduction of exchange rate risk for corporate borrowers at commercial banks 1.2.1 Concept 10 1.2.2 Necessity of reducing exchange rate risk for corporate borrowers 10 1.2.3 Contents of reducing exchange rate risk for enterprises 10 1.2.4 Factors affecting the reduction of exchange rate risk for corporate borrowers 17 1.3 Experience in reducing exchange rate risk of some commercial banks 20 Chapter 2: Reality of reducing exchange rate risk for corporate borrowers at BIDV – Sogiaodich1 Branch 23 2.1 Introduction of BIDV – Sogiaodich1 Branch 23 2.1.1 Foundation and development history 23 2.1.2 Organizational structure 23 2.1.3 Business results 27 2.2 Reality of exchange rate risk for corporate borrowers at BIDV – Sogiaodich1 Branch 28 2.2.1 Results of loan offering to corporate customers at BIDV – Sogiaodich1 Branch 28 2.2.2 Reality of risks for corporate borrowers at BIDV – Sogiaodich1 Branch 34 2.2.3 Some solutions to reduce exchange rate risk for corporate borrowers at BIDV – Sogiaodich1 Branch 41 2.4 Factors affecting the reduction of exchange rate risk for corporate borrowers at BIDB – Sogiaodich1 Branch 46 2.4.1 Bank-related factors 46 2.4.2 Enterprise-related factors 49 2.4.3 Environment-related factors 51 2.5 Assessment of the reduction of exchange rate risk for enterprises borrowing funds from BIDV – Sogiaodich1 Branch 52 2.5.1 Achievements 52 2.5.2 Limitations 52 2.5.3 Causes of the limitations 52 Chapter 3: Solutions to reduce exchange rate risk for corprate borrowers at BIDV – Sogiaodich1 Branch 54 3.1 Development orientation of BIDV – Sogiaodich1 Branch 54 3.1.1 General orientation 54 3.1.2 Development orientations in the next five years 54 3.1.3 Orientation to reduce exchange rate risk for corporate borrowers 55 3.2 Solutions to improve the reduction of exchange rate risk for corporate borrowers at BIDV – Sogiaodich1 Branch 55 3.2.1 Diversifying and improving the quality of derivatives 55 3.2.2 Enhancing the position of the branch 56 3.2.3 Improving the level of consultant team of exchange rate risk prevention 57 3.2.4 Increasing relevant sources of information 59 3.2.5 Other solutions 59 3.3 Recommendations 60 3.3.1 To enterprises 60 3.3.2 To the State 61 Conclusion 63 REFERENCES 65 ABBREVIATIONS NO ABBREVIATIONS FULL FORMS Joint Stock Commercial Bank for Investment and Development of Vietnam Chief Executive Office BIDV CEO LC Letter Credit US United States UK United Kingdom VND Viet Nam Dong i LIST OF TABLES Table 2.1: Business results of the branch in the stage of 2014 -2016 27 Table 2.1: Results of lending operations to export enterprises 31 Table 2.2: Results of lending operations to import enterprises 33 Table 2.3: List of risks for export enterprises 35 Table 2.4: Risk structure of lending operations to export enterprises 36 Table 2.5: List of risks for import enterprises 38 Table 2.6 Risk structure of lending operations to import enterprises 39 Table 2.7: Forward contract of foreign currency transaction of BIDV 41 Table 2.8: Number and value of forward contracts with export enterprises 43 Table 2.9: Number and value of forward contracts with import enterprises 44 Table 2.10: Number of future, swap and option contracts 45 Table 2.11: Results of survey with customers on the diversity of exchange rate risk products 46 Table 2.12: Results of survey with customers on exchange rate risk consultants 47 Table 2.13: Results of survey with customers on prestige of the bank 48 Table 2.14: Results of survey with customers on charges of exchange rate risk preventive tools 48 Table 2.15: Results of survey with customers on enterprises’ perception 49 Table 2.16: Results of survey with customers on enterprises’ ability to take risks 50 Table 2.17: Results of survey with customers on enterprises’ ability to analyze and forecast market 50 ii LIST OF CHARTS AND FIGURES Figure 2.1: Organizational structure of BIDV – Sogiaodich1 Branch 27 Chart 2.1 Results of export and import financing for corporate customers 29 Figure 2.1 Basis of risks for export enterprises 37 Figure 2.2 Basis of risks for import enterprises 40 iii INTRODUCTION Rationale of the study Any business activities related to exchange ratearelikely to suffer from exchange rate risk In international trading activities, export- import enterprisesall face foreign exchange risk For importers, the foreign exchange risk arises when foreign currencies to be paid in the future increase in price compared to the domestic currency,particularly when a customer opens an L/C to importmachinery and equipment to create fixed assets or sellthem in the country At the time of goods import, the exchange rate is low, so the company sellsgoods at low price However, at the time of L/C settlement, the exchange rate increases sharply, leading to losses.Or whenan enterprise borrows money in foreign currency, its annual liabilities increase due to increased exchange rate will have to set up a large provision(the case of Pha Lai Thermal Power Joint Stock Company -stock code PPC).For exporters, the foreign exchange risk arises when foreign currencies to be received in the future reduce in price compared todomestic currency This happens in cases where exporters (especially agricultural and aquatic product exporters) sign contracts with their foreign counterparts and plan to buy domestic products for export.The exchange rate at the time of signing contracts is high However, right after that, the exchange rate reducesand makes the revenue from export currency when converted into VND lower than the domestic purchase price, causing enterprises to suffer from losses In addition, in the context wherecurrency inflation has become a common phenomenon, the purchasing power of currencies, including the key currency for international payment, always fluctuates anddirectly affects the interests of entities engaged in international trade, investment and credit transactions Therefore, it is necessary to prevent exchange rate risk in export and import activities in particular and in business in general In order to prevent foreign exchange risk, credit institutions as well as enterprises often use tools such as forward transactions, swap transactions, option transactions and future transactions These preventive activities have been remarkably paid attention in recent years when the exchange rate fluctuates unpredictably In 2015, the exchange rate had changed four times.In the period of 2005 – 2015, the USD exchange rate increased from 11,000 to 22,000 dong The main reason for exchange rate risk in foreign currency trading was that this business activity depends mainly on the changes of the world’s economy with such Thus, in order to be able to achieve the goal of becoming a modern, multi-functional bank and enhanceitsposition and prestige as a leading commercial bank, one of the solutions is diversifying banking products, in which the activity of reducing exchange rate risk for borrowers has been and will remain important 3.1.3 Orientation to reduce exchange rate risk for corporate borrowers Investand improve the technology system; enhance the exploitation of utilities and create products with added value to serve customers Focus on the phase of product and service introduction and promote the branch’s image to the public through mass media Step by provide exchange rate riskpreventive tools to customers; consider this a key activity in the upcoming years with scientific, effective operation principles Ensure sufficient internal force to create conditions for the leap in the development of the exchange rate risk preventive tools to enterprises Promote the deployment of exchange rate risk preventive toolsand expansion of customers; accelerate the branch's credit market share in import-export activities Implement comprehensive service packages to improve the business efficiency of the branch Develop various products and derivatives to meet the needs of customers as well as best prevent the exchange rate risk for corporate borrowers at the branch 3.2 Solutions to improve the reduction ofexchange rate risk for corporate borrowers at BIDV – Sogiaodich1 Branch 3.2.1 Diversifying and improving the quality of derivatives At present, the development of derivatives to reduce exchange rate risk for corporate borrowers must go together with the quality of the products The quality of derivatives that the branch provides is the legitimacy, liquidity and ability to adapt to the risks that enterprises encounter Therefore, BIDV – Sogiaodich1 Branchshould complete the technical specifications of exchange rate riskpreventive tools, or derivatives,namely: Regarding option contracts, the branch should add in the content of the option contractthe right to buy foreign currencies when the enterprise does not exercise the rights to choose Import enterprise customers of the branch implement option contracts not only for preventing exchange rate risk but also need to ensure that they have enough foreign currencies to pay for due import contracts 55 The branches should clearly identify that the transaction of derivative contracts is a preventive financial business operation forpreventing exchange rate risk for corporate borrowers Based on that, the branch should determine reasonable transaction charges for derivative operations Together with the introduction of exchange rate risk preventive toolstoenterprises as pure derivative financial tools, the branch should further develop hybrid derivatives so thatenterprisescan have moreoptions and select the most appropriate risk prevention tool for them 3.2.2.Enhancing the position of the branch Brand is an important factor contributing to the success of the bank's business operations A good banking brand is made up from many factors, but the most importantthingsare the prestige,quality of products, and professional service of the bank In order to build and develop its brand, BIDV – Sogiaodich1 Branchneeds to improve and improve its capacity and prestige through the expansion of its business activities and diversification of its products based on a fast, safe and efficient process Besides, BIDV – Sogiaodich1 Branch also needs to diversify its support services, expand the channels of communication between customers and the bank to create the best utilities for customers apart from its traditional services to provide customers with the highest satisfaction In addition, BIDV – Sogiaodich1 Branch needs to create a professional business style to serve customers with good skills,fast and effective working methods, and friendly and courteous service Along with building and developing the brand, BIDV – Sogiaodich1 Branch should promote its image and information to all classes of people andenterprises and economic organizations by means of newspapers, radio, television, the internet, leaflets, panels, sponsoring for television programs and seminars, especially seminars related to export and import, etc These are quite extensive and effective forms of approaching customers These regular activities will give customers a good impression, a reminder of "BIDV – Sogiaodich1 Branch" whenever they have needs for loans or exchange rate risk prevention products The building and development of the branch’s brand must be carried out regularly and continuously The bank needs to pay much attention to marketing and consider it as an important activity in their business strategy to bring its products and services to all 56 customers, attract customers to the branchand build a close, sustainable relationship between customers and BIDV – Sogiaodich1 Branch In the past few years, BIDV – Sogiaodich1 Branch has initially paid attention to the market research to understand customers’ needs However, in order to achieve greater success, BIDV – Sogiaodich1 Branchneeds to develop a mixed marketing strategy consisting of the following major policies: - Information, research, investigation policy: By implementing this policy, the branch can grasp the demand for derivative products on the market, find out what its current and potential customers want from exchange rate risk prevention products of BIDV – Sogiaodich1 Branch This way the bank canclassify customers according to the study objectives and take measures to attract customers of rival banks and build a stable customer network - Price policy: BIDV - Sogiaodich1 Branch needs to make a difference in terms of products compared to other banks through the interest rate policy and supporting services such as advising customersonderivative products, providing customer information for enterprises, forecasting exchange rate fluctuation and advising enterprises to select appropriate derivative products - Distribution policy: This is the fundamental policy for the relationship between the corporate borrowers and the bank To implement this policy, the bank must build up an appropriate distribution network on the basis of considering factors such as locations of transaction counter, facilities and staffallocation - Promotion policy: In order to implement this policy effectively, in addition to advertising activities, the bank must also expand the forms of exchange rate risk prevention and preventive products for corporate borrowers This work needs to be done by all departments, all staff within the branch, especially the consultants 3.2.3Improving the level of consultant team of exchange rate risk prevention The reality at BIDV -Sogiaodich1 Branch showsthat it takesa consultant of exchange rate risk preventionat least two years to masterand understand all of the exchange rate risk preventive tools Therefore, in order to improve the efficiency of exchange rate risk reduction for enterprises, in addition to continuously improving professional skills for experts, consultants, BIDV – Sogiaodich1 Branch needs to train consultants with knowledge in the field of foreign trade economics, operations of derivatives so that they 57 can understand and grasp the needs of customers and advise and support customers more effectively.Consultants of exchange rate risk and derivative products are not only lenders but also companions with enterprises, who understand and give timely advice and supports on the risks that enterprises encounter On the other hand, on the basis of well-equipped knowledge on derivative products, the consultants will easily follow and inspect the production and business activities of enterprises, understand the advantages as well as difficulties the enterprises are having and help enterprises find out and deal with arising problems and ensure safety for the business activities of enterprises and the bank In order for the consultants to be able to research and implement their work, in addition to good knowledge of derivative products and related economic knowledge, they must be goodat foreign languages, computer skills and sales skills In order to improve the quality of exchange rate risk reduction for enterprises, it is urgent to enhance the training of exchange rate consultants Specifically, BIDV – Sogiaodich1 Branchshould create favorable conditions for consultants to participate in training programs on the following aspects: - Foreign language andITcoursesrelated to their work - Courses on regulations, requirements and guidelines for implementation of international payment - Courses on project appraisal, credit analysisand application of marketing in banking - Courses on organizational regulations and issues related to commercial and economic activities - Issues related to derivatives, exchange rate riskpreventive tools If possible, some staff should be sent abroad for training in countries with developed foreign exchange and derivative tool markets Priority should be given to the training and retraining of staff who are directly engaged in the international exchange market on derivative operations in exchange rate insurance as this is a new and complicated field in both theory and practice In addition, knowledge of foreign exchange markets and international currency markets, technical analysis skills, fundamental analysis on the basis of selection, synthesis and analysis of information to predict market changes in order to effectively use derivative operations to prevent exchange rate risk corporate customers of the branch 58 In addition, in order to improve the reduction of exchange rate risk for enterprises, consultants of exchange rate risk prevention must have in-depth knowledge of the market as well as market changes, financial risk preventivetools, transaction methods, valuation techniques, types of risk involved and market rules 3.2.4Increasingrelevant sources of information Since the prevention of foreign exchange rate riskis directly related to the different countries, the source of information provided to enterprises is very important and necessary The quality of information sources is a decisive factor in the effectiveness of the exchange rate risk prevention activities of the branch Information must always be updated, fast, and accurate so that the branch can respond promptly to the risks that occur to both the bank and enterprises The sources of information that the bank should pay attention when providing preventative products are: - The source of information related to exchange rates in the market, changes of exchange rates, and foreign exchange policies of countries in the world; Identify factors affecting exchange rates such as the balance of payments of a currency, economic growth, interest rates, inflation, political or psychological factors - The source of information to reduce risks to customers:The branch must actively learn about their customers to get accurate information - The source of information about the borrowers' partners: These mainly are enterprises in foreign countries, so customers as well as the branch are have difficulty in finding information about them Therefore, BIDV – Sogiaodich1 Branchshould have channels to find out necessaryinformation as a basis for further assessment in the process of providing exchange rate risk preventive tools for enterprises The branch should modernize the bank and provide modern machinery and equipment to meet the technical requirements when providing exchange rate risk prevention products to customers as well as to ensure that information is provided smoothly and accurately throughout the system 3.2.5 Other solutions In order to encourage enterprises to use its derivative products to prevent exchange rate risk, BIDV – Sogiaodich1 Branch should implement the following solutions: Firstly, the branch can approach customers by organizing seminars to introduce and improve customers’ understanding of derivatives tools and its importance in exchange rate 59 risk prevention In addition, the branch should follow business activities to support the import and export activities as well as foreign exchange investment activities of enterprises The development of derivatives and derivative markets gives enterprises the opportunity to choose the most suitabletype of foreign exchange transaction for their business goals and to solve the conflict between profits and risks When using derivative instruments, enterprises have the choiceof desired exchange rates Once the financial environment in which the solutions for foreign currency risk preventionis improved, the branch plays the role as a derivative tool provider,meeting the needs of customers with different preventive tools It is necessary to introduce and instruct enterprises to use preventive solutions to prevent exchange rate risk and provide them with detailed,easy-tounderstand and easy-to-use instructions, for using currency derivative products Secondly, the branch should invest in modern facilities and equipment in addition to the facilities and equipment of Reuters, Thomson or Dowjones News The branch should be equipped with advanced risk management software and charging software for derivative operations provided to enterprises When derivatives are sold to enterprises, they are tools for protecting exchange rates However, when used for speculation, thesetools suffer from risks themselves Moreover, expanding cooperation with foreign banks is essential in the current trend to make use ofsupport in knowledge, risk management analysis systems for various types of derivative operations in general and optionand future foreign exchange operations in particular 3.3 Recommendations 3.3.1 To enterprises With unpredictable fluctuation of the exchange rate, enterprises with foreign currency-related business activities are very vulnerable to the exchange rate risk if they not use derivative foreign exchange tools In fact, the demand for using derivative financial products in preventing exchange rate risk is only at a potential level since most of the companies think that the fluctuation of exchange rate in the market is not too great Thus, the first and crucial step in accelerating the application of derivatives to prevent exchange rate risk for enterprises is to change the perception of enterprises about the development of financial derivative markets Currently, the awareness of enterprises on exchange rate risk prevention is very limited This may lead to the misunderstanding and misuse ofderivatives 60 In the current trend of integration in the open economy,the mechanism of fixed exchange rate in our country is no longer appropriate and sooner or later will have to follow the demand and supply of foreign currency in the market Therefore, the prevention of exchange rate risk is very important in the present as well ascoming time It is necessary for enterprises to equip themselves with knowledge of foreign exchange derivatives to know how to prevent exchange rate risk Although commercial banks can advise and select tools to help customers, but it will be more beneficial if enterprises have a team specializing in exchange rate risk prevention, especially import-export enterprises with great business opportunities The state can not protect enterprises in the long time Therefore, enterprises need to raise its awareness of exchange rate risk prevention or speculation in the foreign exchange market to capture business opportunities in the market as well as to be more active in preventing exchange rate risk Enterprises with foreign currency-related activities should have a specific risk management policy, which stipulates the authority to determine the level of financial risk clearly for each leadership position and for each region The responsibility of decision maker on usingderivatives always burdens leaders and employees in the unit Currently, Vietnamese companies not explicitly define the responsibilities and rights of the management and staff in the unit, so this is also a constraint in promoting the use of foreign exchange derivatives to prevent exchange rate risk 3.3.2 To the State Improving currency and foreign exchange market in Vietnam –aiming Vinaforexto international integration When talking about the foreign exchange market, people often think of it as an unlimited market in terms of space and time and its internationality It means that the foreign exchange market operates 24 hours a day and is not framed within a single country but spread all over the world to meet the needs of foreign exchange trading At present, VinaForex basically only operates within the country The participation in the international foreign exchange market of Vietnamese commercial banks is still very limited.In addition,the improvement of the foreign exchange market in Vietnam and the diversification of foreign exchange trading tools play an important role in developing market as well as limiting exchange rate risk for enterprises Therefore, in order to develop derivative currency tools in preventing foreign exchange risk for enterprises, the foreign 61 exchange market must gradually be integrated into the international foreign exchange market Perfect the legal environment for currencyderivatives The State Bank needs to improve the legal environment for these transactions in the following directions: Firstly, under Decision No 145/2004 QĐ- NHNN, commercial banks are only allowed to sell options to economic organizations and individuals without being allowed to buy options Therefore, in the coming time, the State Bank should allow commercial banks to buy options from economic organizations and individuals This means that they have the rights to sell options to the bank This will create more opportunities for enterprises to actively participate in the market Moreover, due to the closepolicy of foreign exchange control,enterprises can not buy or sell foreign currency for the speculation purpose or to prevent exchange rate risk but only for payment purposes Therefore, in the coming time, in addition to loosening the mechanism of buying and selling derivatives, the State Bank should expand the subjects of buying and selling foreign currencies to overcome the other situation in which enterprises not have tools to prevent the exchange rate risk Therefore, the State Bank must intervene and strictly manage to protect enterprises.When enterprises are protected by the State Bank's policies, there is no need to use exchange rate risk preventive tools Secondly, due to the new and complicated operations of foreign exchange trading, there arelots of potential risks Therefore, the State Bank should strengthen the management of foreign exchange transactions through the management of foreign currency status Instead of only regulating foreign currency status at the end of the day, the State Bank should apply the regular foreign currency status at any time Developed countries such as the US, UK, Germany, Japan and Singapore all have derivativesexchange During previous time, derivative financial transactions in Vietnam are mainly derivative transactions in foreign exchange market such as forward, swap and option contracts, which are performed on the decentralized market based on the agreement between customers and commercial banks Due to the lack of a centralized market, the liquidity of derivative financial tools is low Customers are reserved when see derivatives such as future or option contracts, which are difficult to liquidate when needed Current decentralized transactions have many weaknesses and reduce the demand for transactions 62 of clients such as: The costsfor searching for information and customers are usually high but trading customers are not many Many customers are afraid because they not think they have enoughknowledge andexperience to be able to negotiate equally with banks Finally, it is very important that the exchange rate mechanism should be more flexible and reflectcorrectly the supply-demand relationship of foreign currencies in the market based on the special drawing rights basket of countries having trading relations with Vietnam In the context of increasing capital inflows to Vietnam, a more flexible exchange rate mechanism will suppress pressures on inflation At the same time, the flexibility of exchange rate will contribute to the development of derivative tool markets, which provide better insurance for exchange rate risk This is also completely in line with the reform under Ordinance on Foreign Exchange, effective June 1, 2006, and the Decree including (i) Liberalizing current transactions, (ii) Loosening capital transactions, (iii) Opening foreign exchange market, facilitating the renewal of the exchange rate mechanism in a more flexible manner, (iv) Minimizing the dollarization phenomenon in the economy to contribute to enhancing the exchange of the Vietnam Dong, (v) andManage the State's foreign exchange provisions in line with the modern Central Bank model CONCLUSION The deeper integration into the regional and world economy has put forward the need to develop risk preventive tools in the financial market in general and in the foreign exchange market in particular to protect investors, especially export-import enterprises in Vietnam, from risks of fluctuation in exchange rate Based on the dialectical materialism and analytical synthesis methods, the thesis studied the general theoretical basis on exchange rate risk, contents and factors affecting the managementof exchange rate risk for enterprises who were customers of commercials banks At the same time, the author studied the reality of using derivative foreign exchange tools to reduceexchange rate risk for corporate borrowers at BIDV - Sogiaodich1 Branch The thesis also proposed some solutions to enhance the effectiveness of restriction of exchange rate risk for enterprises The author drew some conclusions as follows: The prevention of exchange rate risk for corporate borrowers from BIDV Sogiaodich1 Branch was still limited The causes came from 63 many sides: fromenterprisesthemselves,from the provision of services of BIDV – Sogiaodich1 Branch and from the legal basis of the State Bank There were a variety of measures to promote the use of derivatives of BIDV – Sogiaodich1 Branchto reduce the exchange rate risk for enterprises including: Diversifying and improving the quality of derivative products,enhancing the position of the branch,improving the quality of consultants andstrengthening the sources information related to exchange rate risk prevention In addition, proposals to enterprises and the State Bank were also made to improve the efficiency of exchange rate risk prevention activities 64 REFERENCES Pham Ngoc Anh (2006), Foreign exchange risk prevention - requirements for Vietnamese export- import enterprises, Journal of Economic Research – Hanoi: Academy of Economics , 1/2004, No DoThi Thu Thuy (2004), Solutions to limit exchange rate risk in foreign currency trading activities at Military Commercial Joint Stock Bank BjörnDöhring (2008), Hedging and invoicing strategies to reduce exchange rate exposure: a euro-area perspective, Economic papers 299/2008 http://ec.europa.eu/economy_finance/publications CPA Australia (2009), A guide to managing foreign exchange risk, International Economic Review, 49, 1295-1312 A group of authorsat Foreign Trade University (2013), Basic problems of exchange rate risk and management of exchange rate risk at Vietnamese exportimport enterprises, Library of Foreign Trade University A research team at Ho Chi Minh City University of Economics (2010), Use of foreign exchange derivatives to prevent exchange rate risk for Vietnam exportimport enterprises, Major-grade scientific research competition Ghassem A Homaifar (2004), Managing Global Financial and Foreign Exchange Rate Risk, John Wiley & Sons, United States of America Nguyen Minh Kieu (2012), Foreign exchange market and risk prevention solutions, Statistical Publishing House Annual report of BIDV – Sogiaodich Branch (2014, 2015, 2016) 10 Report on business activities of external business department, credit management department, and international payment department of BIDV - Sogiaodich Branch (2014, 2015, 2016) 11 Nguyen Minh Kieu, Nguyen XuanThanh (2013), Derivative Stock, Fullbright Economics Teaching Program, Statistical Publishing House 12 Simkins (2014): Firmwide Risk Management of Foreign Exchange Exposure by U.S Multinational Corporations, Oklahoma State University Working Paper 13 Weston (2015): Exchange-Rate Hedging: Financial versus Operational Strategies, in: American Economic Review, 91(2), 391-395 65 14 John C Hull (2006), Options, Futures, and other Derivatives; th Edition; Pearson Prentice Hall Publisher 15 Paul R Krugman, Maurice Obstfeld (2005), International Economics, th Edition, Pearson Addison Wesley Publisher 16 Jeff Madura (2006), Financial Markets and Institutions, th Edition Thomson Learning Publisher, United States of America 66 APPENDIX SURVEY QUESTIONNAIRE My name is Truong Quoc Duong and I am currently working on a thesis entitled "Solutions to reduce exchange rate risk for corporate borrowers at Joint Stock Commercial Bank for Investment and Development of Vietnam – Sogiaodich1 Branch" Please take a bit of your time to fill in the survey form below The information you provide will contribute to the success of my research I commit that the information you provide will only used for research purpose without for commercial purposes This information will be kept confidential and only be presented to teachers on request Thank you very much for your help and cooperation INFORMATION Please put a cross (X) in the box next to the item you choose: Your name: Gender: Male Female Address: Age: Under 30 31- 40 Over 40 Income: Less than million - million - million More than million OPINIONS Please select the options from to The assessment levels are set as follows: 1.Very dissatisfied Dissatisfied Neutral Satisfied Very satisfied 67 I Content Questions 5 5 The branch always provides customers Diversity of with diversified products exchange The products provided by the branch are rate risk suitable for the enterprises products The products provided by the branch have many utilities II Content Questions The branch’s employees have good expertise in exchange rate risk The branch’s employees have the ability to Consultants create confidence for customers in the advising process The branch’s employees are always interested in specific needs of customers III.Content Questions The information regarding exchange rate forecast of the branch is very reliable Prestige of the bank The branch has good reputation in the field of foreign exchange and foreign exchange risk The branch always provides full information on exchange rate risk IV.Content Questions Charges of The branch is always interested in exchange designing the most cost effective products rate risk for enterprises preventive tools The costs of using exchange rate risk tools are competitive with other banks 68 The costs of reducing exchange rate risk are suitable financial capacity of enterprises V.Content Questions 5 Exchange rate risk prevention is very important Enterprises’ Exchange rate risk prevention helps reduce perception transaction losses Exchange rate risk prevention helps to ensure business efficiency VI.Content Questions The extent of exchange rate risk is Enterprises’ ability to take risks negligible Enterprises are willing to accept when exchange rate risk occurs The expenses of enterprises include provision for exchange rate risk VII Content Enterprises’ ability to analyze and forecast market Questions Enterprises are confident in their forecasting ability Thanks to the exchange rate risk provision, enterprises reduce losses when the risks occur Enterprises have all necessary information to forecast exchange rate risk Your suggestions in improving the quality of foreign exchange services of BIDV - Sogiaodich Branch to reduce foreign exchange risks for enterprises: ………………………………………………………………………………… ………………………………………………………………………………… ………………………………………………………………………………… 69 ... DEVELOPMENT OF VIETNAMAT SO GIAO DICH BRANCH MỘT SỐ GIẢI PHÁP HẠN CHẾ RỦI RO TỶ GIÁ ĐỐI VỚI DOANH NGHIỆP VAY VỐN TẠI NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM – CHI NHÁNH SỞ GIAO DỊCH Chuyên ngành:... risk 2 015 52 32.9% 40 26.3% 38 31. 1% 64 40.5% 68 44.7% 50 41. 0% 22 13 .9% 24 15 .8% 24 19 .7% 1. 3% 1. 3% 0.0% 18 11 .4% 18 11 .8% 10 8.2% 15 8 10 0.0% 15 2 10 0.0% 12 2 10 0.0% Source: BIDV – Sogiaodich1 Branch... Ratio Year 2 014 Year 2 015 Year 2 016 21. 649 30.969 27 .17 9 9.320 43,05% -3.790 9.785 17 .4 21 18.890 7.636 78,04% 1. 469 12 ,24% 8,43% 10 0 13 7 13 9 37 37,00% 1, 46% 779,7 8 51 932 71, 30 9 ,14 % 81 9,52% Source: