The State Bank of Vietnam (SBV) said on May 30 that it will continue to coordinate with relevant Vietnamese ministries and agencies regarding the US Department of Treasury’s issues of concern, in the spirit of cooperation.
The headquarters of the State Bank of Vietnam (Source: State Bank of Vietnam)
The central bank made the statement after the US department released a monitoring list on May 29 of major trading partners that merit close attention to their currency practices, which includes Vietnam.
The bank will also continue managing the monetary policy to control inflation, stabilise the macro economy, spur economic growth appropriately, and manage the forex rate flexibly in line with developments of both domestic and foreign markets, as well as characteristics of the Vietnamese economy, so as to not create unhealthy competitive edge in international trade.
On May 29, the US treasury department issued its Semiannual Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the US, with the monitoring list comprising of China, Japan, the Republic of Korea, Germany, Italy, Ireland, Singapore, Malaysia, and Vietnam.
In the report, the department reviewed and assessed the policies of an expanded set of 21 major US trading partners, whose bilateral goods trade with the US exceeds 40 billion USD annually. Previously, it only covered the 12 largest trading partners.
The report concluded that “no major US trading partner met the relevant 2015 legislative criteria for enhanced analysis” as a currency manipulator.
Countries with a current-account surplus with the US equivalent to 2 percent of gross domestic product are eligible for the list. Other thresholds include persistent intervention in markets for a nation’s currency, and a trade surplus of at least 20 billion USD. Countries that meet two of the three criteria are placed on the watch list.
China only triggered one of the criteria, but still merited inclusion given its large, increasing surplus.
Meanwhile, Vietnam was put on the list as it satisfied the criteria for bilateral trade and current account surpluses.
The US Department of the Treasury will continue monitoring information and statistics regarding Vietnam’s trade, current account, monetary and macroeconomic policies, and may work with relevant Vietnamese agencies as it sees necessary.