One of Vietnam's leading commercial banks is to extend more credit to Russian banks. This means that Russian importers of Vietnamese goods will have more opportunities to open letters of credit (L/Cs) without first having to put up a cash deposit.

The Bank for Foreign Trade of Vietnam (Vietcombank) is to make credit of between US$80 and US$100 million available to several commercial Russian banks. Last year Vietcombank said it extended credit of US$30 million to Rosvneshtorgbank (Russian Foreign Trade Bank).

Trade between Vietnam and Russia is considered to fall short of potential volumes and has been hampered by lack of access to routine trading mechanisms. Since the collapse of the former Soviet Union Vietnamese and Russian banks have had no arrangements for opening L/Cs. This has resulted in traders resorting to financing exports via banks in third countries.

Vietnamese exports to Russia in 2000 were worth nearly US$97 million and consisted mainly of coffee, rubber, tea, rice, clothing and footwear, vegetables and fruits. Russian exports to Vietnam in the same year amounted to over $US191 million, comprising machinery, spare parts, vehicles, fertilisers and steel.