Vietnam Included in US Currency Monitoring List
On Tuesday, the United States announced that Vietnam has been included in its “monitoring list” of foreign exchange policies, while Switzerland and South Korea have been removed from the group. The US Treasury Department, in its semi-annual report to Congress, also emphasized the need for greater transparency from China. The report focuses on countries with significant trade surpluses and those that actively intervene in foreign exchange markets to gain trade advantages.
Treasury Secretary Janet Yellen stated that most foreign exchange intervention by US trading partners during the reporting period involved selling dollars, which strengthened their currencies. Yellen also highlighted various global economic uncertainties, including Russia’s conflict with Ukraine, geopolitical tensions in the Middle East, persistent inflation, and potential stresses in China’s property sector.
The latest report from the Treasury includes six economies on its “monitoring list” of major trading partners. These countries, namely China, Germany, Malaysia, Singapore, Taiwan, and Vietnam, have surpassed certain thresholds related to trade surplus, current account surplus, and net foreign currency purchases.
Vietnam has been returned to the monitoring list due to its significant global current account surplus, reaching 4.7% of GDP during the monitoring period. However, it is important to note that the report did not label Vietnam as a currency manipulator. The US Treasury acknowledged Vietnam’s efforts in addressing concerns and maintaining stability in its financial market, currency, and macroeconomics despite facing numerous challenges.
In a joint statement on upgrading Vietnam-US relations to a comprehensive strategic partnership, the US expressed appreciation for Vietnam’s ongoing efforts to modernize its monetary policy and enhance the transparency of its exchange rate management framework. The State Bank of Vietnam (SBV) confirmed its commitment to maintaining close cooperation and effective communication channels with the US Department of Finance to address mutual concerns promptly.
Overall, the inclusion of Vietnam in the monitoring list reflects the US government’s attention to currency practices and macroeconomic policies among major trading partners, while recognizing Vietnam’s progress in monetary policy and exchange rate management.