Vietnam remains on US Treasury’s Monitoring List for currency manipulation

  • Vietnam remained on the US Treasury’s Monitoring List for currency manipulation. A country is labelled a currency manipulator if it meets two of three criteria: a 4-quarter goods surplus with the US of over USD20bn, a current account surplus over 2% of GDP, and net purchases of foreign currency, conducted repeatedly, in at least 6 out of 12 months, totalling at least 2% of GDP.
  • Vietnam’s goods surplus with the US reached USD47bn, well above the USD20bn threshold, in the 4 quarters from 3Q18-2Q19, both inclusive.
  • Net foreign exchange purchases were at 0.8% of GDP. Vietnam does not publish information on its foreign exchange market interventions, but the US Treasury report said that “the Vietnamese authorities have credibly conveyed to Treasury that net purchases of foreign exchange were 0.8[%] of GDP over [3Q18-2Q19 both inclusive]”.
  • The Treasury noted that for Vietnam, a large goods trade surplus has been offset in recent years by deficits in both services trade and primary income, and the current account surplus stood at 1.7[%] of GDP over 3Q18-2Q19 inclusive. This is near but not over the 2% threshold.

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