Vnd

Vietnam wants to be the US’s credible and trusted partner, while trust is one of the key factors to help further the Vietnam – US comprehensive partnership.

A devaluation of the VND would have serious consequences on macro-economic stability, the trust of investors and the people, resulting in a big loss to the economy, Prime Minister Nguyen Xuan Phuc has said.

While Vietnam is at risk of being listed as currency manipulator by the US, such a risk appears low, as the US will likely continue to reduce its dependence on Chinese exports by reorganizing its supply chain with other partners.

The detail of the investigation is scheduled to be made public this week.

In addition to a weakening US dollar, the ample supply of dollars thanks to Vietnam’s record trade surplus is a major factor that could keep a stable USD/VND exchange rate.

In the long term, high gold prices could affect prices of other goods, weaken the Vietnamese dong and push inflation, said expert Nguyen Tri Hieu.

Vietnam’s central bank is expected to pursue a stronger dong, especially as this might weigh on the recovery of the country’s export-oriented manufacturing sector over the coming months.

Any currency weakness is likely to be mild so as to avoid possible sanctions from the US given Vietnam's inclusion in the US Treasury’s currency manipulator watch list.

Vietnam central bank is ready to intervene in the foreign exchange market in case of necessity.

With nearly US$83 billion of foreign exchange reserves, the State Bank of Vietnam has more than enough reserves to comfortably meet redemptions.