Joint Statement from the U.S. Department of the Treasury and the State Bank of Vietnam

Joint Statement from the U.S. Department of the Treasury and the State Bank of Vietnam

U.S. Secretary of the Treasury Janet L. Yellen and State Bank of Vietnam Governor Nguyen Thi Hong met virtually today. At the conclusion of their meeting, Secretary Yellen and Governor Hong issued the following joint statement:

The United States and Vietnam are trusted partners with friendship grounded in mutual respect.  In keeping with this strong partnership, the U.S. Department of the Treasury (Treasury) and the State Bank of Vietnam (SBV) share the goals of maintaining the strength, stability, development, and resilience of each country’s economy and financial system.

Treasury and the SBV have had constructive discussions in recent months through the enhanced engagement process, and reached agreement to address Treasury’s concerns about Vietnam’s currency practices as described in Treasury’s Report to Congress on the Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States.

The SBV underscores that the focus of its monetary policy framework is to promote macroeconomic stability and to control inflation. Vietnam confirms that it is bound under the Articles of Agreement of the IMF to avoid manipulating its exchange rate in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage and will refrain from any competitive devaluation of the Vietnamese dong. The SBV is also making ongoing efforts to further modernize and make more transparent its monetary policy and exchange rate framework. In support of these efforts, the SBV will continue to improve exchange rate flexibility over time, allowing the Vietnamese dong to move in line with the stage of development of the financial and foreign exchange markets and with economic fundamentals, while maintaining macroeconomic and financial market stability.

The SBV will continue to provide necessary information for Treasury to conduct thorough analysis and reporting on the SBV’s activities in the foreign exchange market in Treasury’s semiannual Report to Congress on the Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States.

Treasury will inform other U.S. government agencies that it has reached agreement with the SBV to address Treasury’s concerns about Vietnam’s currency practices.

“I welcome the constructive dialogue between the Department of the Treasury and the State Bank of Vietnam on currency policy, and the mutual understanding we have reached,” said Secretary Yellen. “I believe the State Bank of Vietnam’s attention to these issues over time not only will address Treasury’s concerns, but also will support the further development of Vietnam’s financial markets and enhance its macroeconomic and financial resilience.”

“I highly appreciate the work done by the technical levels of our institutions towards a shared understanding on currency matters based on the principles of partnership and mutual respect. The State Bank of Vietnam will continue to manage exchange rate policy within its general monetary policy framework to safeguard the proper functioning of the monetary and foreign exchange markets, to promote macroeconomic stability and to control inflation, not to create an unfair competitive advantage in international trade,” said Governor Hong.

Secretary Yellen and Governor Hong are committed to maintaining close cooperation between Treasury and the SBV, and look forward to addressing other shared challenges, such as supporting a strong and inclusive recovery from the COVID-19 pandemic.

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