Foreign curency exchange at the Ho Chi Minh City Development Bank. (Photo: VNA) Hanoi (VNA) – The State Bank of Vietnam (SBV)said it will continue coordinating with concerned Vietnamese ministries andagencies to communicate with the US regarding the US Department of Treasury’s latest report on macroeconomic and foreignexchange policies of major trading partners of the US.
The report placedVietnam on the monitoring list on currency practice alongwith China, Japan, the Republic of Korea, Germany, Italy, Ireland, Singapore,Malaysia and Switzerland.
The SBV noted it willalso continue implementing monetary policies to control inflation, maintain astable macro-economy, support economicgrowth and flexibly manage the forex rates in line with market developments andthe monetary policies’ objectives, so as to not create unfair competition inforeign trade.
According to the SBV, the US Department of Treasury onJanuary 14 issued a SemiannualReport on Macroeconomic and Foreign Exchange Policies of Major Trading Partnersof the US which establishes a Monitoring List of countries that merit closeattention to their currency practices and macroeconomic policies.
In the report, the department reviewed 20 major UStrading partners with bilateral goods trade with the US of at least 40 billionUSD annually against the thresholds it has established for the three criteria –a significant bilateral trade surplus with the US at at least 20 billion USD, a material current accountsurplus at at least 2percent of GDP, and persistent, one-sided intervention occurs when netpurchases of foreign currency are conducted repeatedly, in at least 6 out of 12months, and these net purchases total at least 2 percent of an economy’s GDPover a 12-month period.
This is thesecond time Vietnam has been named in the report. The country was first mentioned in the May2019 report as it met two criteria on bilateral goods trade with the US and a material current account surplus.
The January2020 report keeps Vietnam on the list even though it only met one criterion on goodstrade surplus with the US,which continues to rise significantly to reach 47 billion USD over the four quarters through June 2019.Over this same period, Vietnam’s current account balance steadily narrowed, to1.7 percent of GDP while net purchases of foreign exchange were 0.8 percentof GDP, it adds.
The report also concludes that during the period, nomajor trading partner met all three criteria to be labelled a currencymanipulator./.
VNA
