According to the semiannual report on "Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States," recently released by the US Department of the Treasury, Vietnam continues to be classified among countries that do not manipulate their currency.  

The report evaluates the economic policies of major trading partners, which account for approximately 78% of US international trade over the four most recent quarters ending in Q2 2024.  

The Treasury Department applies three criteria to assess potential currency manipulation by major trading partners:

1. Bilateral trade surplus with the US: Surplus must not exceed $15 billion.  

2. Current account surplus: Surplus must not exceed 3% of GDP.  

3. Prolonged one-sided intervention in foreign exchange markets: Based on the net foreign currency purchases of a central bank over 12 months.  

If an economy surpasses two of these three thresholds, it is placed on the "monitoring list" for at least two reporting cycles.  

The Treasury Department releases the report twice annually during the fiscal year.  

In July 2021, the US Department of the Treasury and the State Bank of Vietnam reached an agreement to address US concerns regarding Vietnam's monetary practices. As part of the agreement, Vietnam committed to modernizing and enhancing transparency in its monetary policy and exchange rate framework while refraining from using exchange rate policies for unfair competitive advantages.  

The latest report concludes that no trading partner has intervened in exchange rates to influence the balance of payments or gain an unfair competitive edge in international trade.  

Currently, Vietnam is one of seven economies on the monitoring list for surpassing two criteria: a bilateral trade surplus and a current account surplus. The other six economies are China, Japan, South Korea, Taiwan (China), Singapore, and Germany.  

As of June 2024, Vietnam's bilateral trade surplus with the US reached $113 billion, making Vietnam the third-largest goods trading partner with a surplus in the US market. However, Vietnam recorded a $1.6 billion deficit in bilateral services trade with the US.  

Vietnam's current account surplus stood at 5% as of June 2024, reflecting differences in goods and services trade, net income from overseas workers, and foreign investors.  

Goods trade surplus increased by 8.6% during the reporting period, attributed to recovering foreign demand for manufactured goods.  

Vietnam's foreign exchange reserves reached approximately $84.1 billion by the end of June 2024, representing 19% of GDP. Net foreign exchange sales from July 2023 to June 2024 amounted to 1.5% of GDP, equivalent to roughly $6 billion.  

Tuan Nguyen