Vanuatu

Financial Environment

1. Local currency
The currency of Vanuatu is Vanuatu (VT for short). Watts can be freely exchanged with US dollars, Australian dollars, euros, Japanese yen, Hong Kong dollars, and other currencies. In the past three years, Vatu has shown an appreciation trend against the US dollar and a depreciation trend against the Australian dollar, euro, and New Zealand dollar.

At present, the statutory reserve requirement ratio is maintained at 5.25%. The Chinese yuan can be directly exchanged with local currency, but settlement still needs to be made through a US dollar intermediary.

2. Foreign exchange management
Vanuatu does not implement foreign exchange controls, and the government does not impose restrictions on the remittance of funds by foreign-funded enterprises. However, the bank must be informed in advance of the exchange amount and the remittance should be made according to the bank's daily exchange rate. The applicable exchange rate is determined by each commercial bank. Individuals or businesses can open accounts in any major currency at Vanuatu Bank.
According to Vanuatu law, it is not allowed to bring cash exceeding 1 million watts or equivalent foreign currency upon entry.

3. Banking institutions
Reserve Bank of Vanuatu
Established in 1981, formerly known as the Central Bank of Vanuatu, it was renamed to its current name in 1989. The Reserve Bank exercises the functions of the Central Bank of Vanuatu,
This includes the formulation of Vanuatu's national macroeconomic policies, among others. The Reserve Bank is also responsible for handling the detailed accounting procedures for the economic and technological cooperation agreement between the governments of China and Vanuatu.

National Bank of Vanuatu
Established in 1991, it is a state-owned bank.

Agricultural Bank of Vanuatu
Established after taking over the Vanuatu Cooperative Reserve Bank in 1991. In November 1998, it merged with the Vanuatu Development Bank and became a state-owned bank.

ANZ Banking Group Ltd
Established in 1970, formerly known as Barclays Bank in the UK, it was renamed to its current name in 1985. Establish a branch for ANZ Bank in Vanuatu, Australia.

Bank of South Pacific
Starting from July 1, 2016, South Pacific Bank of Papua New Guinea acquired the branch of former Western Pacific Bank of Australia established in Vanuatu.

BRED Vanuatu Limited
Banque Populaire, the second largest bank in France, is a branch in the Pacific region.

Wanfuteng Bank Limited
On April 30, 2019, an official signing ceremony was held at the Reserve Bank of Vanuatu, with Wanfuteng Bank becoming the sixth member.

4. Financing conditions
Investors are entitled to national treatment for local loans, and commercial banks are the ultimate decision-makers on whether loans can be approved. On April 29, 2013, ANZ Bank Vanuatu Branch opened a cross-border trade RMB settlement business in Vanuatu.

Since 2018, Vanuatu has implemented a tight monetary policy, with a statutory reserve (SRD) of 5.25%, a deposit interest rate of 0.46%, a bank rediscount rate of 2.90%, and a current asset ratio (LAR) of 5%. It has also implemented active import substitution and export financing facilities (ISEFF) and disaster financing credit facilities (DRCF). As of December 2018, the broad money M2 was 88.955 billion watts, and the narrow money M1 was 55.063 billion watts.

5. Credit card usage
Vanuatu's major hotels, restaurants, car rental services, travel agencies, duty-free shops, and other internationally recognized credit cards such as Mastercard and Visa, as well as Chinese UnionPay cards.