US removes Vietnam from currency manipulator list

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.

There is insufficient evidence to conclude they are manipulating their exchange rates.

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, said that the U.S. Treasury’s lifting of the label could make Vietnam more confident in its trade and monetary policies.