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WASHINGTON — Vietnam’s central bank has agreed to improve its exchange rate flexibility as part of an ongoing effort to make its monetary policy and exchange rate framework more transparent, following a meeting between Treasury Secretary Janet Yellen and State Bank of Vietnam Governor Nguyen Thi Hong.
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 The Biden administration rescinded the “manipulator” designation in April, saying it had found insufficient evidence the country was manipulating its currency, but had not yet completed the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.
In a joint statement on Monday, Ms. Yellen and Ms. Nguyen said the State Bank of Vietnam reiterated that the goal of its monetary policy framework is to promote macroeconomic stability and control inflation.
The Vietnamese central bank 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.
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