Opposing proposal for direct Chinese RMB - VND trading
Economist Nguyen Minh Phong has suggested that Vietnam should not accept the proposal by the Chinese Business Association and the Industrial and Commercial Bank of China for direct trading between Chinese currency Renminbi (RMB) and Vietnamese currency Dong (VND) in the country.
Dr. Phong pointed out China’s ambition to expand the impact of RMB in an attempt to globalize its currency. This move also aims to encourage partners to purchase Chinese products and receive payments in RMB.
China had made similar proposal but it was flatly rejected by the Vietnam Ministry of Industry and Trade (MoIT). Chinese RMB is not strong enough on global markets, which may cause losses to Vietnam’s economy. Over-using the RMB might reduce our income in other foreign currencies which are needed for economic development, said the MoIT.
Other economists said it is essential to reconsider payment methods with Chinese businesses. In fact, Chinese RMB is not really credential enough and has not yet become a key currency in capital flows of international financial institutions like WB, ADB and IMF, they noted.
