In the Questions and Answers (Q&A) session at the National Assembly (NA) meeting on June 6, 2019, Governor Le Minh Hung answered the question concerning the U.S. Department of the Treasury (U.S. Treasury) putting nine nations including Vietnam on the monitoring list.
In his answer, Governor Le Minh Hung said that, on May 29, 2019, the U.S. Treasury issued a report on "Macroeconomic and foreign exchange policies of major trading partners of the United States" and put nine nations including Vietnam on the monitoring list.
In accordance with the U.S. regulations, there are three criteria of assessing major trading partners with the U.S.: First, significant bilateral trade surplus with the US of at least US$ 20 billion; Second, material current account surplus of at least 2% of the GDP; Third, persistent, one-sided intervention in foreign exchange markets, which is expressed in net foreign currency purchases for at least 6 months over a 12-month period with a total amount of foreign currency net buying equivalent to at least 2% of the GDP in a 12-month period.
With regards to the above mentioned criteria, according to Governor Le Minh Hung, the U.S. Treasury assessed that Vietnam satisfies two criteria, i.e. significant bilateral trade surplus with the US of over US$ 20 billion and the material current account surplus of over 2% of the GDP. Regarding the one-sided intervention in foreign exchange markets, the amount is lower than the U.S. stipulated amount.
The May 2019 Report concludes that no trading partner is manipulating the currency. The SBV Governor said, “We need to emphasize that we has been administering the monetary policy in order to stabilize the macro economy and control the inflation. We do not use macro-economic policies, including monetary and exchange rate policy, to create a competitive advantage for unfair international trade.”
The SBV Governor stated that the U.S. Report only gave a number of policy recommendations to the Government, ministries and agencies, including the SBV. These policy recommendations by the U.S. are relatively similar to the recommendations made by the IMF’s annual mission. The policy recommendations of the IMF and the U.S. are also in accordance with the Government’s roadmap to direct the ministries and agencies, including the SBV, in order to improve the mechanism of macroeconomic management.
The SBV Governor emphasized “in the coming time, the SBV will continue to coordinate with the relevant ministries and agencies to exchange and provide the U.S. Treasury with necessary information to clarify our managing orientations, macro-economic developments, and current account balance, as well as the trade data.”
Le Hang