The headquarters of the State Bank of Vietnam in Hanoi (Photo: VNA)
Hanoi (VNA) - The State Bank ofVietnam (SBV) said on December 17 that its management of exchange rate in recent years,within the general framework of monetary policy, aims to achieve the consistentgoal of controlling inflation and stabilising the macro-economy, not to createunfair competitive advantages in international trade.
The central bank made the statementin response to the US Treasury Department’s labelling Vietnam, along withSwitzerland, as currency manipulator, in accordance with the US Department ofFinance December report on the macro-economic and foreign reserve policies ofthe US’s trade partners.
According to the SBV, the tradesurplus with the US and its current accountsurplus are the result of a range of factors related to the specific characteristicsof the Vietnamese economy.
The SBV’s purchaseof foreign currencies aims to ensure the smooth operation of foreign currencymarkets in the context of abundant supply, contributing to stabilising the macro-economyand building up State foreign currency reserves, which remain low compared toregional countries, so as to enhance national financial-monetary security.
Vietnam treasuresstable and sustainable economic-trade ties with the US, the SBV said, addingthat it will work withministries and agencies on issues of concern to the US in a cooperative andmutually-beneficial spirit, towards achieving a harmonious and fair traderelationship under the bilateral action plan.
At the same time,the SBV will continue managing monetary policy in a way that will controlinflation, stabilise the macro-economy, and reasonably support economic growth.It will manage exchange rates flexibly based on macro-economic balances, marketdevelopments and the objectives of monetary policy, not to create any unfair gainsin international trade.
The US Treasury also put 10 countriesto a watch list of those it suspects deliberately devalue their currenciesagainst the dollar, which are China, Japan, the Republic of Korea, Germany,Italy, Singapore, Malaysia, Taiwan (China), Thailand, and India.
The US uses threecriteria to determine if a country is a currency manipulator. In addition to thecurrent account surplus criterion, the two others are a bilateral trade surpluswith the US of at least 20 billion USD and intervention in foreign-exchange marketsthat exceeds 2 percent of GDP./.
