U.S. affirms Viet Nam not manipulating currency

According to the semiannual report on "Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the U.S." released in November 2024, Viet Nam was named in the Monitoring List along with China, Japan, South Korea, Taiwan, Singapore, and Germany.

The department applies three criteria to assess potential currency manipulation by major trading partners, including (i) Bilateral trade surplus with the U.S.: Surplus must not exceed US$15 billion; (ii) Current account surplus: Surplus must not exceed 3 percent of GDP; (iii) Prolonged one-sided intervention in foreign exchange markets: Based on the net foreign currency purchases of a central bank over 12 months.

If an economy surpasses two of these three thresholds, it is placed on the "monitoring list" for at least two reporting cycles.

The Treasury Department releases the report twice annually during the fiscal year.

The report noted that Viet Nam's bilateral trade surplus with the U.S. has expanded dramatically over the past six years, primarily driven by growth in goods trade, led by electronics and machinery.

The bilateral goods and services surplus was US$111.7 billion over the four quarters through June 2024. Over the same period, the bilateral goods trade surplus was US$113.3 billion, US$7 billion higher than the level from the previous four quarters.

Viet Nam continues to have the third-largest goods surplus with the U.S. Viet Nam has modest bilateral services trade with the U.S. and has long run a small bilateral services trade deficit. In the four quarters through June 2024, that services deficit was US$1.6 billion.

Meanwhile, Viet Nam's current account surplus stood at 5 percent of GDP over the four quarters through June 2024. Net sales of foreign exchange from July 2023 to June 2024 were 1.5 percent of GDP. That figure is equivalent to about US$6 billion. According to the latest available public data, foreign exchange reserves stood at US$84 billion as of May 2024.

In the Joint Leaders' Statement on elevating Viet Nam-U.S. ties to comprehensive strategic partnership, the U.S. also highly appreciates Viet Nam's ongoing efforts to modernize and further enhance the transparency of its monetary policy and exchange rate management framework.

On the basis of Viet Nam-U.S. comprehensive strategic partnership framework, the State Bank of Viet Nam has stated that it will continue to collaborate with relevant ministries and sectors to maintain close cooperation and establish regular, effective communication channels with the U.S. Department of the Treasury, thus enhancing mutual understanding and information sharing, and promptly addressing emerging issues of mutual concern./.