Vietnam Central Bank issued a statement confirming that Vietnam does not use the dong currency exchange rate as a tool for unfair international trade advantages. The confirmation came after the US declared Vietnam as a country to manipulate the currency for trade gains.
“The management of Vietnam's exchange rate over the years has been within the framework of our monetary policy. And is intended to achieve the goal of controlling inflation. And stabilize the economy at the macro level "
Vietnam's central bank stated
The central bank's statement also stated that Vietnam's trade surplus and current account surplus with the US This is a result of a variety of factors related to the specific situation of the Vietnamese economy, adding that the recent purchase of foreign currency by the Central Bank of Vietnam. Is to build confidence that Operation in the foreign exchange market will be smooth. By considering the amount of foreign currency that is sufficient to meet the demand
The move by the central bank of Vietnam came after the US Treasury released a half-year report on currency distortions yesterday. It was listed Vietnam and Switzerland as the countries that used to manipulate the currency to control inflation.
The US Treasury report states that Vietnam has deliberately reduced the dong by 4.7% last year against the dollar. The Vietnamese government intervened in the dong by buying a net foreign currency worth $ 20 billion last year. It operates through the Central Bank of Vietnam
My question is why US accused the Vietnam of manipulation, is it illegal to reduce value of currency to attract buyers on their side?