The State Bank of Vietnam (SBV) will be consistent in regulating monetary policies according to market developments, with no aim for an unfair competitive edge in international trade, it said in a statement on Tuesday.
The central bank released the statement after the US Treasury continued to name Vietnam in a list of ten countries to be monitored for alleged currency manipulation, in its semi-annual Report on Macro-economic and Foreign Exchange Policies of Major Trading Partners of the United States delivered to Congress on Tuesday.
“The SBV has never used exchange rates to compete with trade partners and never purposely intervened in monetary policy to help with exports,” the Vietnamese central bank said.
The SBV said it would continue to regulate monetary policy to control inflation, stabilise the macro-economy and support economic growth at a reasonable level.
“We will continue to regulate the exchange rates flexibly in line with domestic and international market movements as well as Vietnam’s economic characteristics, with no aim of creating an unfair international trade competitive advantage,” it said.
During a conference to implement tasks for the banking industry in 2020 earlier this month, SBV governor Le Minh Hung also affirmed that one of Vietnam’s priorities this year was to continue working with major trading partners to prove that Vietnam does not manipulate its currency.
“The SBV never uses monetary and foreign-exchange policies for unfair trade gain. Vietnam does not manipulate the currency,” Hung stressed.
When on the list, the US Treasury will continue to look at data on Vietnam’s trade, current account balance, and macro-economic and monetary policy, the SBV said.
“The US Treasury will possibly discuss issues with relevant Vietnamese agencies when necessary. The SBV, in conjunction with other Vietnamese ministries and agencies, will continue to share information with them and co-operate to tackle issues of concern,” it said.
The US Treasury’s report found that ten major trading partners warrant placement on Treasury’s “Monitoring List” of major trading partners that merit close attention to their currency practices include China, Germany, Ireland, Italy, Japan, Korea, Malaysia, Singapore, Switzerland and Vietnam.
In a report in May last year, Vietnam for the first time became one of nine countries to be monitored due to a trade surplus with the US and a highly positive current account balance. The report also said that a listed country would be monitored in the next two reviews.
In the latest report this month, Vietnam remained on the watch list of currency manipulators even though it has satisfied only one condition, a trade surplus.
Vietnam’s trade surplus with the US rose to almost $47 billion last year from $34.87 billion in 2018.
The country’s current account balance accounted for 1.7 per cent of its gross domestic product (GDP) while its net foreign exchange purchases were equal to 0.8 per cent of its GDP. Vietnam’s GDP reached $262 billion last year.
VIET NAM NEWS/ANN