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 its biannual report to Congress, has also emphasized the need for increased transparency from China, as reported by AFP. The report primarily focuses on countries with substantial trade surpluses and active involvement in foreign exchange markets to gain trade advantages.
Treasury Secretary Janet Yellen stated that during the report period, most foreign exchange interventions by U.S. trading partners involved selling dollars, which had the effect of bolstering their own currencies. Yellen further highlighted the global economic uncertainties stemming from events like Russia’s conflict with Ukraine, geopolitical tensions in the Middle East, persistent core inflation, and the potential challenges in China’s property sector.
The latest Treasury report has identified six economies on its “monitoring list” of significant trading partners, signifying the need for vigilant scrutiny of their currency practices and macroeconomic policies. These countries include China, Germany, Malaysia, Singapore, Taiwan, and Vietnam, all of which exceeded at least two of the following thresholds: a trade surplus with the U.S. exceeding $15 billion, a high global current account surplus exceeding 3% of GDP, and continued net foreign currency purchases exceeding 2% of GDP over a year.
Vietnam, in particular, was returned to the monitoring list after its global current account surplus surged to 4.7% of GDP during the monitoring period, according to Reuters. The State Bank of Vietnam clarified that the report did not categorize Vietnam as a currency manipulator. The U.S. Treasury acknowledged Vietnam’s efforts in addressing concerns and maintaining stability in its financial markets, currency, and macroeconomics, despite numerous challenges.
In a joint statement on upgrading the Vietnam-U.S. relationship to a comprehensive strategic partnership, the U.S. appreciated Vietnam’s ongoing modernization efforts and the transparency of its monetary policy and exchange rate management framework. This partnership entails continued cooperation and effective communication channels between Vietnam’s central bank and the U.S. Department of Finance to promptly address mutual concerns.
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Source: Vietnam Insider