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US adds Vietnam to currency monitoring list, removes two others

US adds Vietnam to currency monitoring list, removes two others

Wednesday, November 08, 2023, 08:36 GMT+7
US adds Vietnam to currency monitoring list, removes two others
A customer makes a transaction in Vietnamese dong at a bank in Ho Chi Minh City. Photo: Tu Trung / Tuoi Tre

The United States said Tuesday it has added Vietnam to a "monitoring list" of foreign exchange policies, while removing Switzerland and South Korea from the group.

The US Treasury Department, in a semi-annual report to Congress, also called for greater transparency from China.

The report looks at countries with large trade surpluses and which actively intervene in foreign exchange markets to gain trade advantages.

"Most foreign exchange intervention by US trading partners over the report period was in the form of selling dollars, actions that served to strengthen their currencies," said Treasury Secretary Janet Yellen in a statement.

She added that the global economic outlook faces "elevated uncertainty associated with Russia's war against Ukraine, geopolitical stresses in the Middle East, still-elevated core inflation, and the potential for stresses in China's property sector to deepen."

The Treasury's latest report includes six economies on its "monitoring list" of major trading partners, signaling they merit close attention to their currency practices and macroeconomic policies.

The list includes China, Germany, Malaysia, Singapore, Taiwan, and Vietnam.

Switzerland and South Korea were removed from the list this time, having met only one of three criteria considered by the Treasury for two consecutive reports.

The criteria considered are a large trade surplus with the United States, a significant current account surplus and evidence of "persistent, one-sided intervention" in foreign exchange markets.

Germany, Malaysia, Singapore, Taiwan, and Vietnam were found to have triggered two criteria, the Treasury said Tuesday.

Meanwhile, China's "failure to publish foreign exchange (FX) intervention and broader lack of transparency around key features of its exchange rate mechanism continues to make it an outlier among major economies," said the Treasury.

"It remains on the Monitoring List for this reason as well as due to its outsized trade imbalance with the United States," the report said.



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