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The State Bank stated that the bilateral trade surplus with the United States and the current account surplus are the result of a series of factors related to the characteristics of the Vietnamese economy – Photo: TT
On December 16, the US Department of Finance issued a December 2020 report on “Macroeconomic Policies and Foreign Exchange of Major US Trading Partners”, Included in a Watch List of 10 Economies . including China, Japan, Korea, Germany, Italy, Singapore, Malaysia, Taiwan, Thailand, and India.
Also in this report, Vietnam (along with Switzerland) was identified as “currency manipulation” by the United States Department of Finance.
In this regard, the State Bank said that according to the United States Trade Promotion and Improvement Act 2015, the United States Department of Finance needs to carry out an advanced analysis of exchange rate policy and the economy. The foreign relations of the main trading partners meet the criteria of bilateral trade surplus with the United States, current balance surplus, and foreign exchange intervention.
These criteria are specifically quantified as a bilateral merchandise trade surplus with the United States of at least $ 20 billion. The current account surplus is equal to at least 2% of GDP. Unidirectional and prolonged intervention in the foreign exchange market, represented by the net purchase of foreign currency for at least 6 months in a 12-month period with a total net purchase of foreign currency equivalent to at least 2% of GDP in a 12-month period.
The Banco del Estado has affirmed that the management of the exchange rate in recent years -in the framework of general monetary policy- aims to achieve the consistent objective of controlling inflation, stabilizing the macroeconomy, and not generating a competitive advantage. International business competition is not fair.
The bilateral trade surplus with the United States and the current account surplus are the result of a series of factors related to the peculiarities of the Vietnamese economy.
The recent intervention of the Banco del Estado in the purchase of foreign currency aims to ensure the proper functioning of the foreign exchange market in a context of abundant supply of foreign currency, contributing to macroeconomic stability and at the same time consolidating reserves. The state’s foreign exchange capital is at a low level compared to other countries in the region to improve national financial and monetary security.
The State Bank stated that Vietnam attaches great importance to a stable and sustainable economic-commercial relationship with the United States and will coordinate with the relevant ministries and agencies to exchange and work on issues that the United States has. concern in the spirit of cooperation, mutual benefit, towards harmonious and fair trade relations in accordance with the cooperative action plan between the two countries.
“At the same time, the State Bank continues to administer monetary policy to control inflation, stabilize the macroeconomy, support economic growth reasonably, manage exchange rates flexibly, in line with macrobalances, market developments and the monetary policy objectives are not intended to create an unfair competitive advantage in international trade ”, stated the Banco del Estado.
In May 2019, the US Department of Finance also included Vietnam on the watch list because it met two criteria of a bilateral trade surplus with the US and a current balance surplus.
State Bank: ‘Vietnam does not manipulate the currency’
