WASHINGTON — Vietnam has pledged to refrain from weakening its currency to give its exporters an unfair advantage as it seeks to ease tensions over widening trade surplus with the United States
Last year, the Trump administration called Vietnam a currency manipulator and threatened to impose high tariffs on imports from Vietnam. The Biden administration rescinded the “manipulator” designation in April, saying it had found insufficient evidence that the country was manipulating its currency, but had not yet completed the process that could lead to the imposition of duties. customs.
US policymakers and the business community have focused more on Vietnam as the country has grown from a minor trading partner to the sixth largest source of US imports, behind China in the past decade alone. Mexico, Canada, Japan and Germany.
Vietnam has emerged as a major source of furniture, seafood, computers, electronics, clothing, and footwear for the United States.
In a joint statement on Monday, Treasury Secretary Janet Yellen and Vietnamese State Bank Governor Nguyen Thi Hong said the Vietnamese central bank had reaffirmed that the objective of its monetary policy framework was to promote macroeconomic stability and control inflation.
The Vietnamese central bank has agreed to allow the Vietnamese dong to evolve “according to the state of development of financial and foreign exchange markets and economic fundamentals,” the statement said. Vietnam has pledged not to lower its exchange rate to give its exporters a competitive advantage.
It will also continue to provide the necessary information to the Treasury to perform in-depth analysis and reports on its activities in the foreign exchange market, as part of the Treasury’s regular report to Congress.
“I believe that the attention paid by the State Bank of Vietnam to these issues over time will not only address the concerns of the Treasury, but also support the future development of Vietnamese financial markets and improve its macroeconomic and financial resilience,” Ms. Yellen said in the statement.
Trump’s Treasury Department said in December that Vietnam had persistently and unilaterally intervened in foreign exchange markets to limit the appreciation of its currency, and also sought to gain an unfair competitive advantage in international trade through its management of exchange rates.
The Biden administration removed the tag in April, but said it would continue discussions with Vietnamese officials over their economic and monetary policies.
In their statement on Monday, Ms. Yellen and Ms. Hong said the United States and Vietnam are “trusted partners with a friendship based on mutual respect,” and said they were determined to maintain close cooperation. between their two institutions.
Ms. Hong said that Vietnam’s central bank would continue to manage its exchange rate “to preserve the functioning of monetary and foreign exchange markets, to promote macroeconomic stability and control inflation, not to create an unfair competitive advantage in international commerce”.
—Josh Zumbrun contributed to this article.
Write to Kate Davidson at [email protected]
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