US adds Vietnam to currency monitoring list

By Minh Nga, Quynh Trang   November 7, 2023 | 11:38 pm PT
US adds Vietnam to currency monitoring list
A staff counts U.S. dollar notes at a bank in HCMC in 2022. Photo by VnExpress/Thanh Tung
The United States said Tuesday it has added Vietnam to a "monitoring list" of foreign exchange policies, while removing Switzerland and South Korea from the group.

The U.S. Treasury Department, in a semi-annual report to Congress, also called for greater transparency from China, according to AFP.

The report looks at countries with large trade surpluses and which actively intervene in foreign exchange markets to gain trade advantages.

"Most foreign exchange intervention by U.S. trading partners over the report period was in the form of selling dollars, actions that served to strengthen their currencies," said Treasury Secretary Janet Yellen in a statement.

She added that the global economic outlook faces "elevated uncertainty associated with Russia's war against Ukraine, geopolitical stresses in the Middle East, still-elevated core inflation, and the potential for stresses in China's property sector to deepen."

The Treasury's latest report includes six economies on its "monitoring list" of major trading partners, signaling they merit close attention to their currency practices and macroeconomic policies.

The list includes China, Germany, Malaysia, Singapore, Taiwan, and Vietnam.

These countries exceeded two of three thresholds: a trade surplus with the U.S. above $15 billion, a high global current account surplus above 3% of gross domestic product, and persistent net foreign currency purchases exceeding 2% of GDP over a year.

The Treasury said Vietnam was returned to the monitoring list after its global current account surplus shot up to 4.7% of GDP during the monitoring period, according to Reuters.

The State Bank of Vietnam (SBV) said that the latest report did not determine that Vietnam was a currency manipulator, and the U.S. had also made positive comments on the results of Vietnam's monetary policy and exchange rate management.

At recent bilateral meetings, the SBV said the U.S. Treasury assessed that Vietnam had shown seriousness in resolving U.S. concerns and maintained stability for its finance market, currency, and macroeconomics in the context of many difficulties and challenges.

In the two nations’ joint statement on upgrading Vietnam – U.S. relations to a comprehensive strategic partnership in September, the U.S. said it "appreciates Vietnam’s ongoing efforts to further modernize and enhance the transparency of its monetary policy and exchange rate management framework, to promote macroeconomic stability, and to ensure the safety and soundness of the banking system."

Based on the comprehensive strategic partnership between the two countries, the central bank said it would continue to coordinate with related units to maintain close cooperation and establish regular and effective exchange channels with the U.S. Department of Finance, thereby enhancing understanding, sharing information and promptly resolving arising issues of mutual concern.

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