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Tuesday, July 16, 2024

Vietnam, U.S. reach agreement over U.S.’s designation of Vietnam as currency manipulator

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HCMC – The U.S. Department of the Treasury and the State Bank of Vietnam (SBV) have reached an agreement over the former’s designation of Vietnam as a currency manipulator. In mid-April, the U.S. Department of the Treasury removed Vietnam from the list of countries manipulating their currencies, reversing a decision of the Trump administration in December 2020

The agreement was announced in their joint statement released on July 19, following a virtual meeting of Treasury Secretary Janet Yellen and SBV Governor Nguyen Thi Hong.

According to the joint statement, the two sides had constructive discussions over the past few months and reached an agreement over the U.S. Department of the Treasury’s concerns over Vietnam’s currency practices, as stated in a report on the forex and macroeconomic policies of large trade partners of the United States sent to the Congress.

Yellen said she hailed the constructive discussions between the two sides on monetary policies and their mutual understanding. The U.S. Department of the Treasury will announce the joint statement with the SBV to other U.S. Governmental agencies.

Meanwhile, the SBV, Vietnam’s central bank, stressed that the key goals of its monetary policies are to get inflation under control and stabilize the macroeconomy.

The SBV is striving to further modernize and make more transparent its monetary policy and exchange rate framework, and improve the exchange rate flexibility over time, SBV Governor Hong said.

She added that the SBV would continue to manage exchange rate policies within its general monetary policy framework to ensure the proper functioning of the monetary and foreign exchange markets to promote macroeconomic stability and control inflation, not to create an unfair competitive advantage in international trade.

The SBV would continue providing necessary information so that the U.S. Department of the Treasury could complete its report on the SBV’s operation in the forex market.

On December 16 last year, the U.S. Department of the Treasury under the administration of President Donald Trump labeled Vietnam a currency manipulator, accusing it of intervening in the foreign exchange market to offer an edge to its exports.

The department considered three criteria to label Vietnam a currency manipulator–a US$20-billion bilateral trade surplus with the United States, foreign currency intervention exceeding 2% of GDP and a global current account surplus exceeding 2% of GDP.

By Dung Nguyen

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