![]() ![]() Meanwhile, emerging market central banks have raised interest rates by 4,415 bps year-to-date, compared to 2,745 bps for the whole of 2021.Īmong major central banks, only China and Japan have maintained loose monetary policy, thanks to relatively low inflation and to boost the domestic economies. The European Central Bank on July 21 increased its benchmark interest rate by 0.5% for the first time in 11 years and is signalling further hikes this year after consumer prices in the eurozone were expected to rise to 8.9% in July.ĭata from Reuters showed seven central banks of the Group of 10 delivered 350 basis points of rate hikes last month – nearly half of the total 775 bps administered by policymakers across the group this year to date. That takes the cumulative June-July increase to 150 bps – the steepest since the early 1980s. ![]() Last week, the US Federal Reserve (Fed) raised interest rates by another 75 basis points (bps) – the second straight month and its third this year – in an effort to fight inflation which hit a 40-year high of 9.1% in June. USTR's probe had found that Vietnam was taking "unreasonable" actions to push down the value of its currency to make its exports cheaper, but held off on imposing tariffs.HANOI: Global central banks are in a rush to raise interest rates to cool rampant inflation and their moves are challenging the State Bank of Vietnam’s (SBV) policy making in a way to support the economic recovery while sustaining macroeconomic sustainability. Trade Representative Katherine Tai said her agency will monitor Hanoi's implementation of the agreement and would work with Vietnam "to ensure that it addresses the acts, policies and practices related to the valuation of its currency that were found actionable in the Section 301 investigation." The department at the time said it would commence "enhanced engagement" with Hanoi to correct the situation, which led Vietnam's foreign currency intervention and global current account surplus to exceed 2% of its GDP. But the Treasury said that Vietnam, along with Taiwan and Switzerland, had tripped its thresholds for the designation under a 2015 law. The Treasury under Yellen in April removed a "currency manipulator" label from Vietnam that had been imposed by the Trump administration last December. "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," Yellen said in the statement. government agencies about the agreement to address U.S. ![]() The Treasury said it would inform other U.S. The Vietnamese central bank said the focus of its monetary policy framework is "to promote macroeconomic stability and to control inflation."īut the central bank agreed to "improve exchange rate flexibility over time," allowing the dong to move in line with the development of the country's markets and economic fundamentals, and to further modernize and make more transparent its monetary policy and exchange rate framework In the joint statement, Vietnam confirmed its commitment under International Monetary Fund rules "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." imports of furniture, electronics, computers and apparel. supply chains away from China amid a tariff war, saw its goods trade surplus with the United State jump 25% in 2020 to $69.7 billion despite the COVID-19 pandemic. Vietnam, which benefited from the shift of U.S. The Trump administration in its final weeks had declared Vietnam a currency manipulator and had threatened to impose punitive tariffs on imports from Vietnam. pressure on Vietnam over its currency practices and ballooning U.S. The agreement, announced in a joint statement by Treasury Secretary Janet Yellen and State Bank of Vietnam Governor Nguyen Thi Hong after a virtual meeting on Monday, follows months of U.S. Treasury to refrain from "competitive devaluation" and make its monetary and exchange rate policies more transparent. WASHINGTON, July 19 (Reuters) - Vietnam has pledged not to deliberately weaken its dong currency to gain an export advantage, reaching an agreement with the U.S.
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