US removes Vietnam from currency manipulator list, reported the VNExpress.
Vietnam had last December rejected the U.S.’s currency manipulator allegations, reiterating that its monetary policies do not target unfair trade advantages.
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The U.S. has removed Vietnam from the list of economies it considers currency manipulators, reversing a decision made by the Trump administration in December.
Its Treasury Department said Friday that no economy currently meets the U.S.’s criteria to be labeled manipulators, but warned that Vietnam, Switzerland and Taiwan would be under enhanced monitoring, according to newswire AP.
There is insufficient evidence to conclude they are manipulating their exchange rates, Reuters quoted it as saying.
A country is labeled a currency manipulator if it sells its currency and buys U.S. dollars to depreciate the former to benefit its exports.
“For calendar year 2020, we have not made a finding regarding the manipulation designation,” a department official told reporters.
Vietnam had last December rejected the U.S.’s currency manipulator allegations, reiterating that its monetary policies do not target unfair trade advantages, and that it would continue to work with the U.S. to ensure a “harmonious and fair” trade relationship.
The State Bank of Vietnam (SBV) said Saturday that Vietnam’s monetary policies in recent years have only sought to control inflation and ensure economic stability, and not derive unfair trade advantages.
It said it has been working to increase exchange rate flexibility, resulting in improvements in the foreign currency market, and these efforts have been acknowledged by the U.S. Treasury Department.
Vietnam would continue to work with the U.S. to ensure a harmonious and fair trade relationship, it said.
Truong Van Phuoc, former chairman of the National Financial Supervisory Commission, told VnExpress that the U.S. Treasury’s lifting of the label could make Vietnam more confident in its trade and monetary policies, according to VNExpress.
In the history of these twice-a-year reports to Congress going back to 1988, Treasury has only branded three foreign governments as currency manipulators. The Trump administration named China as a currency manipulator in 2019 and the US had also named China as a currency manipulator from 1992 to 1994. Treasury also imposed that label on Japan and Taiwan in the 1980s.
Being designated as a currency manipulator can mean the imposition of US economic sanctions if a period of negotiations fails to resolve the issues that the US finds objectionable.