The level of dollarization of an economy is based on the ratio of foreign currency deposits to total money supply (M2), or total deposits; and the ratio of outstanding foreign currency loans to M2, or total outstanding loans.
The central bank believes that for an open economy like Vietnam, the sharp devaluation of the local currency will not help boost exports, but will do more harm than good.
Will Vietnam be chosen as the destination for investors who plan to move out of China?
Foxconn (Taiwan), TLC and Lenovo (China), Hanwa (South Korea) and Yokowo (Japan) are relocating their factories to Vietnam as a shelter from the ‘storm’ of the US-China trade war.
Businesses have expressed concern over the escalation of the US-China trade war, and are hurrying to seek solutions to anticipated problems.