State Bank of Vietnam responds to US’s forex exchange report

Wednesday, 2020-01-15 18:03:27
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NDO – The US Department of Treasury on January 14 issued a Semiannual Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the US which establishes a Monitoring List of countries that merit close attention to their currency practices and macroeconomic policies.

According to the report, Vietnam was placed on the monitoring list on currency practices along with China, Japan, the Republic of Korea, Germany, Italy, Ireland, Singapore, Malaysia and Switzerland.

The State Bank of Vietnam (SBV) has officially responded to the action from the US. SBV said it will continue coordinating with relevant Vietnamese ministries and agencies to keep an open dialogue and exchange with the US side in a constructive spirit. While at the same time continuing to implement monetary policies to control inflation, maintain a stable macro-economy, support economic growth and flexibly manage the forex rates in line with market developments and the monetary policies’ objectives, so as to avoid creating unfair competition in foreign trade.

Vietnam was first mentioned in the report in May 2019 as the country met two criteria on bilateral goods trade with the US and a material current account surplus.

Accordingly, the report in January, 2020 kept Vietnam on the list even though it only met one of the criteria on goods trade surplus with the US, which has continued to rise significantly to reach US$47 billion; Vietnam’s current account balance was estimated at 1.7% of GDP while net purchases of foreign exchange were 0.8% of GDP. On the report, The US Department of Treasury established a monitoring list of 10 major trade partners and concluded that no major trading partner met all three criteria to be labelled a currency manipulator.