US Treasury: Vietnam doesn’t manipulate currency

Vietnam did not seek to manipulate their currencies for a trade advantage or for preventing effective balance of payment adjustments, said the US Treasury.

Rosy Huong

huongthhd@gmail.com December 05, 2021 | 08:22

US Treasury: Vietnam doesn’t manipulate currency

A country is labeled a currency manipulator if it sells its currency and buys US dollars to depreciate the former to benefit its exports.. Photo: VNA

In the latest report, the Treasury, however, found that Vietnam and Taiwan exceeded the Treasury's thresholds for possible currency manipulation and enhanced analysis under a 2015 trade law.

But the Treasury refrained from formally branding any country as currency manipulators.

This is an affirmation of a decision in April when the Treasury removed Vietnam from the list of economies it considers currency manipulators, reversing a decision made by the Trump administration last December.

In April, the Treasury said no economy currently meets the US’s criteria to be labeled manipulators, but warned that Vietnam, Switzerland and Taiwan would be under enhanced monitoring, according to newswire AP.

There is insufficient evidence to conclude they are manipulating their exchange rates.

A country is labeled a currency manipulator if it sells its currency and buys US dollars to depreciate the former to benefit its exports.

The Treasury refrained from formally branding any country as currency manipulators. Photo: usnews

The department said it would continue to work with Vietnam and Taiwan to address US concerns.

The Treasury said "satisfied with progress made by Vietnam to date" and would continue engagement started in May with Taiwan.

The US in July dropped a threat to impose tariffs on Vietnamese goods after the State Bank of Vietnam (SBV) agreed with the Treasury to refrain from manipulation and make its exchange rate practices more transparent, Reuters said.

“The SBV underscores that the focus of its monetary policy framework is to promote macroeconomic stability and to control inflation. Vietnam confirms that it is bound under the Articles of Agreement of the IMF to avoid manipulating its exchange rate in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage and will refrain from any competitive devaluation of the Vietnamese dong. The SBV is also making ongoing efforts to further modernize and make more transparent its monetary policy and exchange rate framework. In support of these efforts, the SBV will continue to improve exchange rate flexibility over time, allowing the Vietnamese dong to move in line with the stage of development of the financial and foreign exchange markets and with economic fundamentals, while maintaining macroeconomic and financial market stability,” the Treasury said in a statement in July./.

Spokeswoman of the Ministry of Foreign Affairs Le Thi Thu Hang. Photo: VNA

Replying to reporters’ question about the report released on April 16 by the Treasury, Spokeswoman of the Ministry of Foreign Affairs Le Thi Thu Hang said Vietnam welcomes the US Department of the Treasury’s positive adjustment to the content related to Vietnam.

She added that in the recent past, Vietnamese relevant agencies have shared information and discussed with the US to clarify that Vietnam’s exchange rate policy has been steered by managerial agencies in a uniform and flexible manner that matches the reality in the country for the purpose of stabilising macro-balances, not to create unfair competitive advantages in international trade.

“In the spirit of respecting the economic – trade ties with the US, a pillar in the comprehensive partnership between the two countries, Vietnam will maintain constructive dialogue and consultation with the US side about this issue,” the spokeswoman added, as cited by VietnamPlus.

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Rosy Huong