WASHINGTON, Nov 7 (Reuters) – The U.S. Treasury Department on Tuesday placed Vietnam back on its foreign exchange “watch list” after its major trading partners did not appear to be manipulating currencies, while placing Switzerland and South Korea under similar scrutiny. He said he would remove it.
Ministry of Finance Semi-annual exchange report The four quarters ending June 2023 showed Vietnam, China, Germany, Malaysia, Singapore and Taiwan on the watch list.
These countries meet three criteria: a trade surplus with the United States of more than $15 billion, a high global current account surplus of more than 3% of gross domestic product, and sustained net foreign currency purchases of more than 2% of GDP per year. I exceeded two of them.
The Ministry of Finance announced that Vietnam was returned to the watch list after the global current account surplus surged to 4.7% of GDP during the monitoring period. Vietnam’s exports have grown rapidly in recent years as companies shift some of their production from China to the fast-growing Southeast Asian nation.
Vietnam’s central bank said in a statement Wednesday that it will maintain close contact with the U.S. Treasury Department and establish regular and effective dialogue to “timely address emerging issues.”
Switzerland and South Korea were removed from the watch list because they met only one criterion for two consecutive monitoring periods.
At the end of 2020, the administration of former US President Donald Trump designated both Vietnam and Switzerland as currency manipulators due to their currency interference, leading to intensive engagement between the US Treasury and Swiss and Vietnamese authorities.
A US Treasury official said Vietnam does not appear to be “backing down” in its exchange practices or engagement with US authorities on currency issues.
There has been some intervention in the foreign exchange market, particularly by Japan, but Treasury officials say these interventions were aimed at depressing the currency’s value against the dollar, and that the currency’s value was lowered to favor exports. The aim is to bring down the
The official said China remains on the watch list due to a lack of transparency in its exchange practices, including how and how it intervenes in the renminbi currency. The Treasury Department estimates that China intervened to support the renminbi during the most recent monitoring period, but not at a level that would trigger a standard.
Report by David Lawder. Edited by Paul Simao and Lincoln Feast.
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