(US Treasury report) Vietnam at risk

Business | 24 Oct 2019 9:46 am

Below is a look at how some countries stack up against the US Treasury’s criteria for the currency manipulator designation:

Vietnam:

What saved Vietnam from violations in all three categories in May was the US Treasury’s interpretation that foreign exchange intervention was made in both directions to better link the Vietnamese dong to the greenback, and that there was “reasonable rationale” for rebuilding inadequate reserves.

Analysts at ING Groep NV see that patience running out for the next report -- especially with Vietnam exceeding both of the other two thresholds.

“President Trump has often found a different basis (for instance, national security) to impose tariffs on a country,” Francesco Pesole, ING’s London-based FX strategist, said in an October 14 research note.

“Vietnam seems particularly at risk of being hit by U.S. tariffs and the Trump administration may consider using the FX manipulator label to threaten tariffs.”

Can Van Luc, chief economist at Hanoi-based Bank for Investment and Development of Vietnam, said the central bank has been more flexible in managing the currency.

The government has also been doing much to improve the trade situation, including “conducting a master plan on anti-trade fraud, while trying to buy more from America,” he said. “However, it takes time to balance trade with the U.S.”-Bloomberg

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