Vietnam keeps clear of US currency manipulator status

The US Department of the Treasury has just delivered its semiannual Report to Congress on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the US. In this report, Treasury reviewed and assessed the policies of major trading partners, who make up more than 80 per cent of US foreign trade in goods and services, during the four quarters through June 2021.

In accordance with the Omnibus Trade and Competitiveness Act of 1988 (the 1988 Act), the report concludes that no major US trading partner manipulated exchange rates between its currency and the US dollar to prevent effective balance of payments adjustments or gain unfair competitive advantage in international trade.

Accordingly, Vietnam continues to meet all three criteria under the Trade Facilitation and Trade Enforcement Act of 2015 (the 2015 Act) during the period under review. The Treasury has conducted an enhanced analysis of Vietnam’s macroeconomic and foreign exchange policies.

As a result of discussions through the enhanced engagement process, the Treasury and the State Bank of Vietnam (SBV) reached an agreement in July 2021 to address the Treasury’s concerns about Vietnam’s currency practices. The US department continues to engage closely with the SBV on Vietnam’s progress in addressing its concerns and is satisfied with the progress made by Vietnam to date.

In April 2021, the US removed Vietnam from the list of economies it considers currency manipulators, reversing a decision made by the Trump administration in December 2020. The decision was made based on insufficient evidence to conclude the country is manipulating their exchange rates in the reviewed period.