The US Department of Treasury has released its latest currency manipulator Monitoring List report on which Vietnam still features. It is one of seven countries on the list alongside China, Japan, Taiwan, Malaysia, Singapore, and Germany.
The three criteria the US Treasury considers are:
- A material account surplus greater than 3 percent of GDP;
- A goods surplus with the US greater than US$15 billion; and
- Foreign currency purchases in eight out of 12 consecutive months, worth more than 2 percent of GDP.
The most recent report found Vietnam had met the first two criteria but not the last over the course of 2023.
Of note, the last criteria only addresses foreign currency purchasing activity but not selling activity. Vietnam, however, has been dipping into its foreign currency reserves in order to stop the dong from devaluing since April.
This has not been without problems either.
Back in March, Le Tien Truong, the head of Vinatext, a major garment and textile producer, told a forum that local garment makers had lost business to competitor countries that have allowed their currency to depreciate. Vietnam made goods are about 15 percent more expensive in some instances, according to Truong.
This speaks to Vietnam’s motives in the way that it manages its currency, in that it does not necessarily appear to be trying to gain an unfair advantage in international trade even if its place on the Monitoring List might suggest otherwise.
Full report: Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States. U.S. Department