PM Phuc dismisses US claim Vietnam manipulates currency for trade advantage

By Duc Minh   December 18, 2020 | 05:43 pm PT
PM Phuc dismisses US claim Vietnam manipulates currency for trade advantage
An employee counts U.S. banknotes among Vietnamese banknotes at a bank in Hanoi, Vietnam. Photo by Reuters/Kham.
Vietnam's monetary policies are meant to ensure economic stability and not create trade advantages for it, Prime Minister Nguyen Xuan Phuc has said.

Speaking at a meeting on Friday, he reiterated the fact that Vietnam is not a currency manipulator as alleged by the U.S. Treasury in a report released on Wednesday.

Its monetary policies are not meant to devalue the dong to derive unfair trade advantages.

The State Bank of Vietnam on Thursday also issued a statement in which it explained that Vietnam's trade surplus with the U.S. and current account surplus are the result of a series of factors related to the nature of its economy.

The State Bank's recent intervention by buying foreign currencies was to ensure the smooth operation of the foreign currency market amid an abundant supply of foreign currencies.

It has helped ensure macroeconomic stability and strengthen foreign exchange reserves, which were at a low level compared to other countries in the region.

However, Phuc also instructed ministries and other agencies to continue working closely with U.S. partners to maintain the strong bilateral cooperation and bring practical benefits to the people and businesses of both countries.

He said government agencies have in recent times been proactive in working with U.S. partners and achieved positive results, especially in trade and investment.

The two sides have resolved issues together, maintained steady trade relations and are working toward a harmonious, sustainable and mutually-beneficial trade balance, he added.

A country is labeled a "currency manipulator" by the U.S. if it has a $20-billion bilateral trade surplus, foreign currency intervention exceeding 2 percent of GDP and a global current account surplus exceeding 2 percent of GDP.

The U.S. Treasury also labeled Switzerland a currency manipulator.

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