By 2020, something unexpected happened when the Vietnam dong increased slightly by 0.2% against the US dollar. Since 2001, the Vietnam dong has always depreciated against the US dollar in nominal terms, averaging about 2.5% per year. However, the Vietnam dong is one of the few currencies in the region that has appreciated against the US dollar since the beginning of the year, which is a rare case in the foreign exchange market. Normally, a stronger US dollar leads to devaluation of currencies of other countries, especially the developing countries. At the beginning of 2021, this index was only at 90.535 points. At the session on 3 December, the DXY index continued to hold at a high level of 96.15 points. At one point, the US Dollar Index (DXY) measured the dollar volatility with six other key currencies, namely, EURO, JPY, GBP, CAD, SEK, and the CHF. Secretary Yellen and Governor Hong are committed to maintaining close cooperation between Treasury and the SBV, and look forward to addressing other shared challenges, such as supporting a strong and inclusive recovery from the COVID-19 pandemic.In November this year, the US dollar climbed to a 16-month high when the US announced its highest inflation rate in the last thirty years. The State Bank of Vietnam will continue to manage exchange rate policy within its general monetary policy framework to safeguard the proper functioning of the monetary and foreign exchange markets, to promote macroeconomic stability and to control inflation, not to create an unfair competitive advantage in international trade,” said Governor Hong. “I highly appreciate the work done by the technical levels of our institutions towards a shared understanding on currency matters based on the principles of partnership and mutual respect. “I believe the State Bank of Vietnam’s attention to these issues over time not only will address Treasury’s concerns, but also will support the further development of Vietnam’s financial markets and enhance its macroeconomic and financial resilience.” “I welcome the constructive dialogue between the Department of the Treasury and the State Bank of Vietnam on currency policy, and the mutual understanding we have reached,” said Secretary Yellen. government agencies that it has reached agreement with the SBV to address Treasury’s concerns about Vietnam’s currency practices. The SBV will continue to provide necessary information for Treasury to conduct thorough analysis and reporting on the SBV’s activities in the foreign exchange market in Treasury’s semiannual Report to Congress on the Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States. In support of these efforts, the SBV will continue to improve exchange rate flexibility over time, allowing the Vietnamese dong to move in line with the stage of development of the financial and foreign exchange markets and with economic fundamentals, while maintaining macroeconomic and financial market stability. The SBV is also making ongoing efforts to further modernize and make more transparent its monetary policy and exchange rate framework. Vietnam confirms that it is bound under the Articles of Agreement of the IMF to avoid manipulating its exchange rate in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage and will refrain from any competitive devaluation of the Vietnamese dong. The SBV underscores that the focus of its monetary policy framework is to promote macroeconomic stability and to control inflation.
Treasury and the SBV have had constructive discussions in recent months through the enhanced engagement process, and reached agreement to address Treasury’s concerns about Vietnam’s currency practices as described in Treasury’s Report to Congress on the Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States.
Department of the Treasury (Treasury) and the State Bank of Vietnam (SBV) share the goals of maintaining the strength, stability, development, and resilience of each country’s economy and financial system. In keeping with this strong partnership, the U.S. The United States and Vietnam are trusted partners with friendship grounded in mutual respect. At the conclusion of their meeting, Secretary Yellen and Governor Hong issued the following joint statement: Yellen and State Bank of Vietnam Governor Nguyen Thi Hong met virtually today.
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