Vietnam doesn’t manipulate currency: US Treasury

In the report on macroeconomic and foreign exchange policies of major trading partners of the US released last week, USDT said a few trading partners that ran current account surpluses did purchase foreign currency (Singapore, Vietnam, and potentially China) on net over these four quarters, but they too did not meet the criterion for preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade.

“In the case of Vietnam, foreign exchange purchases were also modest and were undertaken to reaccumulate some of the more than US$20 billion reserves sold in 2022,” the report states.

In this report, USDT has reviewed the 20 largest US trading partners against the thresholds Treasury has established for the three criteria in the 2015 Act: A significant bilateral trade surplus with the US is a goods and services trade surplus that is at least US$15 billion; A material current account surplus is one that is at least 3% of GDP; and Persistent, one-sided intervention occurs, when net purchases of foreign currency are conducted repeatedly, in at least 8 out of 12 months and these net purchases total at least 2% of an economy’s GDP over a 12-month period.

USDT finds that no major trading partner met all three criteria under the 2015 Act during the four quarters ending December 2023, such that no major trading partner requires enhanced analysis.

However, some countries, including Vietnam, remained in this report’s monitoring list as the country meet the criteria for having a significant bilateral surplus and a material current account surplus.

This year’s monitoring list comprises China, Japan, Taiwan (China), Malaysia, Singapore, Vietnam and Germany. All except Japan were on the monitoring list in the November 2023 Report.

USDT has established a monitoring list of major trading partners, whose currency practices and macroeconomic policies merit close attention. When a major trading partner meets two of the three criteria in the 2015 Act, that trading partner is placed on the monitoring list.

Once on the monitoring list, an economy will remain there for at least two consecutive reports to help ensure that any improvement in their performance, such that they no longer meet two of the three criteria for enhanced analysis, is durable, rather than being due to temporary factors.

As a further measure, USDT will add and retain on the monitoring list any major US trading partner that accounts for a large and disproportionate share of the overall US trade deficit, even if that economy has not met two of the three criteria from the 2015 Act.

Forex rate

The central exchange rate of the dong against the US dollar listed by the State Bank of Vietnam has tended to decrease thanks to the SBV’s timely policies to control exchange rate fluctuations.

Accordingly, on the session ending last week, the SBV announced the rate at VND24,256 per USD, down VND3 compared to June 17, first day of the week.

With a margin of +/-5%, the ceiling exchange rate applied by commercial banks on the last day of the week was VND25,468 per USD and the floor exchange rate was VND23,043 per USD.

At commercial banks, dollar prices last week increased on the buying side and decreased on the selling side.

BIDV on the last day of the week listed the dollar price at VND25,251 and VND25,468 per USD for buying and selling, respectively, an increase of VND20 on the buying side and a decrease of VND3 on the selling side compared to the first day of the week.

At Vietcombank, the dollar price was listed at VND25,217 and VND25,467 per USD for buying and selling, up VND16 on the buying side and down VND4 on the selling side compared to the first day of the week.