EXCHANGE RATE POLICY AND TRADE BALANCE a CASE STUDY OF VIETNAM

MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY DISSERTATION EXCHANGE RATE POLICY AND TRADE BALANCE: A CASE STUDY OF VIETNAM Major: International Trade Policy and Law NGUYEN PHUONG DUNG Ha Noi - 2017 MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY DISSERTATION EXCHANGE RATE POLICY AND TRADE BALANCE: A CASE STUDY OF VIETNAM Major: International Trade Policy and Law Full Name: Nguyen Phuong Dung SUPERVISOR: DR NGUYEN PHUC HIEN Ha Noi - 2017 i DECLARATION I hereby declare that the dissertation is my own research and was completed by the guidance by Dr Nguyen Phuc Hien The research results are independence, faithful and have never been disclosed The data in the in tables and figures serving for analysis and evaluation were collected, inherited and developed by the writer from different sources (published research of other authors, magazine, website) with clear and transparent quotes I will be entirely responsible for the dissertation‘s contents Hanoi, December 5th 2016 Author Nguyen Phuong Dung ii ACKNOWLEDGEMENT The dissertation has been completed under the guidance of Dr Nguyen Phuc Hien I would like to express my sincerely thanks for his great knowledge and enthusiasm supports for my research Besides, I would like to thank my family, my colleagues who have given me lots of facilitation, cares, and encouragement during my research period By this occasion, I am much grateful to the Department of Graduate Studies and Foreign Trade University - who have always create the most favorable conditions for MITPL3 to complete our research program iii TABLE OF CONTENTS INTRODUCTION .1 The importance of research Research purpose Scope of the research Research Methodology Structure LITERATURE REVIEW CHAPTER 1: THEORY OF EXCHANGE RATE POLICY AND TRADE BALANCE 1.1 Exchange rate .9 1.1.1 Definition of exchange rate .9 1.1.2 Exchange rate policy and regime 14 1.2 Trade balance 21 1.2.1 Definition of trade balance .21 1.2.2 Factors affecting trade balance 21 1.3 Impacts of exchange rate policy on trade balance 24 1.3.1 Concept of currency devaluation 24 1.3.2 J-Curve Effect 25 1.3.3 Marshall-Lerner Condition .26 CHAPTER 2: 28 EXCHANGE RATE POLICY AND TRADE BALANCE IN VIETNAM .28 2.1 Overview of exchange rate policy and trade balance in Vietnam 28 2.1.1 Exchange rate policy of Vietnam .28 2.1.2 Trade balance of Vietnam 46 iv 2.2 Empirical study on the impacts of Vietnam exchange rate policy and the trade balance 58 2.2.1 Methodology .58 2.2.2 Empirical Result .63 CHAPTER 3: 69 RECOMMENDATIONS ON EXCHANGE RATE POLICY TO IMPROVE TRADE BALANCE 69 3.1 Orientation of Vietnam in the context of deeper economic integration .69 3.2 Recommendation on exchange rate policy of Vietnam to improve trade balance .71 3.2.1 Moving to a flexible exchange rate 71 3.2.2 Coordination between exchange rate policy and other macro policies 74 CONCLUSION 79 REFERENCES 81 APPENDIX DATA DESCRIPTION .86 v LIST OF ABBREVIATION ASEAN Association of Southeast Asian Nation CPI Comsumer Price Index EU European Union FDI Foreign Direct Investment IFS International Financial Statistics IMF International Monetary Fund OER Offical exchange rate USA United States of America USD United States dollar VND Vietnamese dong WB World Bank WTO World Trade Oranization vi LIST OF TABLES Table 1: Exchange rate arrangements .18 Table 2: Advantages and disadvantages of each exchange rate regime 19 Table 3: Exchange rate amplitudes adjustment, 1996 - 2000 32 Table 4: Exchange rate amplitudes adjustment, 2001 - 2007 33 Table 5: Exchange rate amplitudes adjustment, 2008 - 2015 39 Table 6: Exchange rate adjustment, 2008 - 2015 39 Table 7: Vietnam's exchange rate regimes, 1989 - 2016 42 Table 8: Vietnam‘s macro-economic data, 1996 - 2000 48 Table 9: Export - Import market structure, 2000 - 2005 50 Table 10: Vietnam‘s macro-economic data, 2001 - 2007 51 Table 11: Export - Import market structure, 2005 - 2015 54 Table 12: Vietnam‘s macro-economic data, 2008 - 2015 56 Table 13: Export - Import between Vietnam and US .57 Table 14: Correlation 63 Table 15: Lag order selection criteria .64 Table 16: Short run variance decompositions 65 Table 17: Johansen 66 Table 18: Long run variance decompositions 67 vii LIST OF FIGURES Figure 1: NEER calculation 11 Figure 2: REER caculation 12 Figure 1: J-Curve Effect in currency devaluation .26 Figure 2: Vietnam inflation rate, 1980 - 1996 29 Figure 3: VND/USD exchange rate, 1996 - 2000 .31 Figure 4: VND/USD exchange rate, 2001 - 2007 .33 Figure 5: VND/USD exchange rate, 2008 - 2015 .34 Figure 6: VND/USD exchange rate in 2016 .41 Figure 7: VND/USD NBER and RBER, period of 1996 - 2000 47 Figure 8: Exchange rate and trade balance, 1996 - 2000 47 Figure 9: VND/USD NBER and RBER, 2001 - 2006 49 Figure 10: Exchange rate and trade balance, 2001 – 2007 .50 Figure 11: VND/USD NBER and RBER, 2008 - 2015 52 Figure 12: Exchange rate and trade balance, 2008 - 2015 53 Figure 13: Trade balance in 2016 55 Figure 14: Short run Impulse response function .64 Figure 15: Short run variance decompositions 65 Figure 16: Long run Impulse response function .66 Figure 17: Long run variance decompositions 67 viii SUMMARY The dissertation with the topic of ―Exchange Rate Policy and Trade Balance: A case study of Vietnam‖ has reiterated several theories about the exchange rate, exchange rate policy and trade balance, the factors affecting the exchange rate and the trade balance, the J-curve Effects and Marshall-Lerner conditions Besides, the authors also summarize the exchange rate policy, the trade balance of Vietnam over the periods since the Renovation (Doi Moi) Besides, in empirical study, by using the VAR model, the study has analyzed the impact of the real bilateral exchange rate of VND versus USD and the trade balance of Vietnam focusing on the quarterly data of the period of 2007 Q1 – 2016 Q2 (after Vietnam‘s accession to the WTO) The empirical study shows that in the case of Vietnam: (1) the movement of exchange rate only slightly affects trade balance (2) not only the exchange rate but also other factors have a significant impact on trade performance in Vietnam (3) GDP has the largest effect to trade balance Based on the result, the author gives some recommendation on improving the trade balance, including: (1) Increasing the management floating (2) Coordination between exchange rate policy and other macro policies 73 If the SBV really want the "new regime" to have a positive effect, there must be a transparency of three factors mentioned above, a system to update statistical information and officially announce for market to proactively capture information and prevent risk Conversely, non-transparency information about the balance macro-economic needs, which only rely on subjective target of the SBV, will cause instability, leading to reactions causing unpredictable consequences in the future However, in the context of the global trade and investment situation, after the country had entered a variety of FTAs, gradually floating the exchange rate is inevitable requirement Moreover, exchange rate policy‘s flexibility can support the goal of maintaining the ability of the goods competence of our country in the international market To accomplish this, we need to promote the following activities: Firstly, the choice of a flexible exchange rate only makes sense if SBV has the ability to control the money supply to stabilize the domestic price level If not, the SBV must give priority to the price stability target in line with other macro policies to reduce the adverse effects on the economy Applying greater exchange rate flexibility will make the economy to face some additional risks Therefore, the government has to prepare to handle risks associated with exchange rate flexibility Secondly, moving to exchange rate flexibility with floating regime still needs the intervention of the SBV in the foreign exchange market Three main intervention objectives are to correct exchange rate misalignment, stabilize the market, and accumulate reserves It is not easy to make the intervene decision A timing of intervention mostly depends on the ability of the SBV in detecting and analyzing market indicators based on the SBV‘s experiences and country‘s particular situation, and on the SBV‘s assessment of a variety of factors, including exchange rate misalignment, and exchange rate fluctuation and nature of shocks The SBV should implement a discretionary intervention A rules-based intervention may be appropriate for a short time such as applying exchange rate amplitude in the transition to floating regime 74 Thirdly, the SBV must increase transparency in exchange rate policy The SBV should define intervention objectives and announce these objectives (it does not mean that the SBV must announce in real time and whenever its presence in the market); publish information on foreign exchange reserves, monetary policy instruments, and monetary and exchange rate policy conductions; and announce meeting schedules of policy-making bodies and their speeches Fourthly, the SBV has to promote the development of the forex market, interbank and strengthen linkages between these markets and derivative instruments Applying what model for Vietnam should be studied on the basis of the experience of other countries to develop an appropriate road map and necessary adjustments in operation In addition, it is necessary that the system of legal documents be amended to meet the market requirements and the surveillance systems be strengthened The derivative instruments as futures, options, is the useful tool eliminates operational risks in export and import business Hovewer, this market in Vietnam is growing very meager Moreover, investment in this market in its nature is often speculative rather than risk prevention So, for the development of derivative instruments, the government should take measures to enhance information transparency, strengthen risk forecasting, raising awareness of investors in this market 3.2.2 Coordination between exchange rate policy and other macro policies Currently, the main export items of Vietnam include textiles, footwear, foodstuff, and agricultural products… These commodities have gained a foothold certain international markets, which are mostly challenging markets like the US, Japan, and the EU, where the price absolutely not the only factor determining the possibilities the competitiveness of the exporting country The partners required the goods on the market must comply with the strict standards of technical, sanitary and phytosanitary and specifications of products Export competence depends on not only the exchange rate but also the competitiveness of goods and services that contributed by the quality, technology, marketing and so on Therefore, export enterprises have to take great efforts in improving competitiveness on the 75 international market instead of relying on currency devaluation to stimulate export It is necessary to remain the stability of exchange rate to avoid negative impacts on the economy Exchange rate policy has to combine with the following measures: Firstly, to improve the trade balance, the most important is to improve the competitiveness of export products by increasing quality and applying international standard and technical barriers and strengthen domestic production to replace imports gradually By applying international standards (SBS, TBT…) in producing, exporting products of Vietnam are not discriminated and Vietnam has a legal base to protect the agricultural exporting product By raising the quality and competitiveness, Vietnam exporting products will have high chances to enter challenging markets and to expand into other international markets, increase the export quantity and volume Therefore, Vietnam needs to improve its ability to respond to international standards It is necessary to raise not only farmers‘ but also producers‘ and exporters‘ awareness, promote education and provide them useful information through training programs For example, it requires the change in policies on the export of rice, rice for temporary storage, land limits to improve the income of farmers According to Dr Nguyen Duc Thanh, Director of Vietnam Institute for Economic Policy Research (VEPR): "Instead of a massive export of rice at low prices, Vietnam should aim to focus on the export of high-quality rice To create a more competitive environment of rice export, Vietnam just has to limit on managing of output quality and constructing material areas of enterprises" Meanwhile, in the context of economic integration, tariff barriers will be gradually lifted, therefore, to restrict the imports we need actively build the technical barriers, quality standards (SBS, TBT) to restrict imports and protect massive domestic market is still weak Besides, we need to implement the programs which stimulate domestic consumption, limit the fond of foreign goods 76 Secondly, the government needs to implement more policies supporting exports, such as investment incentive, tax incentive, low-interest loan for enterprises to establish and expand their business and focus on facilitating the exports which are advantage of Vietnam such as rice, rubber, coffee Besides, the government has to offer solutions to protect the exporting products in the international market For example, rice is one of majors export product of Vietnam Vietnam and Thailand account for over 50% of global rice market The Philippines has taken the competition between Vietnam and Thailand in rice exporting to make the lowest price for their import If we don‘t have a solution, rice price will be forced to hover around production price But instead of competition, Vietnamese and Thailand can cooperate to become an alliance to limit the influence of Philippines and negotiate an appropriate price of exporting rice, even for the global market The best solution is an organization for rice exporters based on the model of OPEC with Vietnam and Thailand as the core members Thirdly, developing supporting industries is a requirement At present, Vietnam has to import about 90% of raw materials, spare parts, and components According to the survey of the Japan External Trade Organisation‘s (JETRO) in 2015, the locally sourced ratio for Japanese companies in Vietnam is 32%, much lower in comparison to China or Thailand The locally sourced ratio of motorcycle and electronics industries has increased significantly from 40% to 70% over years However, the localization rate in other sectors (automobile and textiles and garments) is only about to 10% Almost Vietnamese textile enterprises focused on labor-intensive cutting and sewing, working as an outsourcing workshop for foreign companies Domestic companies have to import more than 65% of raw materials (fabrics, accessories)… which mainly from China According to the data in 2014, the produced fabric by country only met 1/5 of demands, it means that USD 10 billion of fabric was imported and a half of this was from China 77 It is clearly that Vietnam's supporting industries are weak and need the incentives and support measures from the government The government has issued many documents on supporting industries (for example the Decree No 111/2015/ND-CP on the development of supporting industry dated Nov 3rd 2015) But until now, policy for supporting industries seems to be not effective Vietnamese enterprises in supporting industries are mostly small or medium They lack funds to invest in modern technologies or human resource training They have little information and don‘t know how to use this Currently, about 80% of parts suppliers in Vietnam are foreign invested enterprises, Therefore, policy makers should review the policies, clearly identify sources of support and donations (loans or guarantees ), simplify procedures and dossier, and widely announce the preferential policies for enterprises The lending fund should coordinate with the credit institutions to form documents to suit the objectives and criteria of the fund to ensure favorable conditions for enterprises to access With the high demand for products of supporting industry, the potential for development of these industries is vast If we can develop the supporting industry, the local source ratio will be increased Therefore, we can lower the import and increase the value-added in export products It will help the trade balance to be improved efficiently Fourthly, the government need to keep the policies stable to attract more foreign investment (do not change the policies or make many adjustments in shortterm) In recent years, the leader of exporters is telephones and components, which mainly from the major contribution of foreign direct investment enterprises The worthiest thing is the phone and phone components with the participation of Samsung, LG, Microsoft (after the acquisition of Nokia), the unit has chosen Vietnam as the main production site in the world and areas, pulling hundreds of parts suppliers, so it helps the export turnover of item group increasing more and more With the deeper development of phone brands as well as famous technology 78 brands in the world at Vietnam, it is believed that export turnover of the mobile industry and the electronics of Vietnam will continue to rise high in the near future The empirical study in part has shown that in both short-run and long-run, the movement of exchange rate only slightly affects trade balance The reason is that the exchange rate in Vietnam is tightly controlled by the SBV for long time The empirical also show that not only the exchange rate but also other factors have a significant impact on trade performance in Vietnam In the recommendation, the author focuses on the coordination between exchange rate policy and other macro policies To improve the trade balance, the most important is to improve the competitiveness of export products by increasing quality and applying international standard and technical barriers to and strengthen domestic production to gradually replace imports It is consistent with the empirical study result that shows that GDP has the largest effect to trade balance 79 CONCLUSION The study with the topic of ―Exchange rate policy and trade balance - A Case Study of Vietnam‖ has reviewed the exchange rate policy and trade balance of Vietnam since the Renovation of Vietnam in 1986 Since Vietnam joining WTO in 2007, apart from such advantages from the accession to the world‘s biggest trade body, Vietnam has faced many challenges such as high consumer price index and trade deficit In empirical study, by using the VAR model, the study has analyzed the impact of the real bilateral exchange rate of VND against USD and the trade balance of Vietnam with quarterly data of the period of 2007 – 2016 The empirical study shows that: (1) the movement of exchange rate only slightly affects trade balance (2) not only the exchange rate but also other factors have a significant impact on trade performance in Vietnam (3) GDP has the largest effect to trade balance Based on the result, the author gives some recommendation on improving the trade balance, including: (1) Increasing the management floating (2) Coordination between exchange rate policy and other macro policies Based on author‘s perspective, moving the exchange rate policy toward floating is evitable due to the global economic integration context Vietnam need to improve the growth quality and competitiveness in all sectors of the entire economy and maintain competitive advantage in major staples like textiles, footwear, garments and agricultural products The effort in enhancing the competitiveness of export products is the great motivation for the country to improve the trade balance However, there are some limitations of this study required a further research, including: - There are many factors influenced on the trade balance, but in the scope of this empirical study, the author only research factors including the exchange rate, GDP and United States‗s GDP In the further study, author will add more factors when examined the factors influenced on trade balance to find out more exactly 80 results - Due to the limitation of time and data, the study used RBER of VND against USD for empirical study But REER is important measure when assessing a country‘s trade capabilities and current import/export situation In further research, author will calculate the REER for more appropriate results - The study used 38 observations during 2007 – 2016 (quarterly data) In the further study, author will add more observations - The trade balance is the difference between exports and imports In the study, author just only examined the factors influence on the trade balance It will be more exactly if using the exports and imports as dependent variables 81 REFERENCES Book, articles, journals, research, study Ahmad, Jaleel and Yang, “Estimation of 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its foreign exchange market, 1986 - 2009”, Griffith Business School, 2010 15 Nguyen Van Tien, “USD exchange rate policy to improve the trade balance during the global financial crisis”, Banking Journal, No 16/2009 16 Nicola Kim Rowbothan, Adrian Saville, Douglas Mbululu, “Exchange rate policy and export performance in efficiency-driven economies”, Economic Research Southern Africa (ERSA) working paper 469, 2014 17 Pham Thi Tuyet Trinh, “The impact of exchange rate fluctuation on trade balance in short and long run”, DEPOCEN Working Paper Series No.2012/23 18 Ramesh C Paudel and Paul J Burke, “Exchange rate policy and export performance in a landlocked developing country: The case of Nepal”, 2015 19 Rose, Andrew, and Janet L., Yellen, “Is there a J-curve?”, Journal of Moneytary Economics, Volume 24, Issue 1, pp.53-68, 1989 20 Shirvani, Hassan and Wilbratte, Barry, “The Relationship Between The Real Exchange Rate and The Trade Balance: An Empirical Reassessment”, International Economic Journal , Volume 11, Pages 39-50, 1997 21 Sugema, Iman, “The Determinants of Trade Balance and Adjustment to the Crisis in Indonesia”, Centre for International Economic Studies, Adelaide University, Autralia, Discussion Paper No 0508, 2005, 83 https://core.ac.uk/download/pdf/6764246.pdf 22 Thorbecke, Willem, “How Would an Appreciation of the Renminbi Affect the US Trade Deficit with China?”, The B.E Journal in Macroeconomics, Volume 6, Issue 3, Page 1–15, 2006 23 Tihomir Stucka, “The effects of exchange rate change on the trade balance in Croatia”, IMF Working Paper, WP/04/65, 2004 24 Vuong Quan Hoang, “Analyses on Gold and US Dollar in Vietnam's Transitional Economy”, CEB Working Paper N° 04/033, 2004 Official reports of organizations 25 IMF, Annual report on Exchange arrangements and exchange restrictions 2016 26 National Financial Supervisory Commission (NFSC), Báo cáo tình hình kinh tế tháng 11 11 tháng đầu năm 2016, http://nfsc.gov.vn/sites/default/files/bccp_t11_final_1.pdf 27 SBV, Annual report, 2010 – 2014 Electronic links and materials 28 Bui Quang Tin, “Chính sách tỷ giá phù hợp tham gia TPP?”, http://cafef.vn/tai-chinh-ngan-hang/chinh-sach-ty-gia-nao-phu-hop-khi-tham-giatpp-20151011104641925.chn, accessed on November17th, 2016 29 Dinh The Hien, “Điều hành tỷ giá nên theo hướng nào”, http://cafef.vn/tai-chinh-ngan-hang/dieu-hanh-ty-gia-nen-theo-huong-nao20151115093707467.chn, accessed on November 17th, 2016 30 GSO, Socio-economic situation, http://www.gso.gov.vn/default.aspx?tabid=621, selected year 2007 to 2016, accessed on November 05th, 2016 31 IMF, International Financial Statistics (IFS), http://www.data.imf.org, accessed on November 05th, 2016 84 - Metadata by Country “Vietnam”: Selected indicators: GDP & Components; Exchange rates; Price, Production and Labor; Trade of Goods; Selected period: 2007 – 2016M06 - Metadata by Country “United States”: Selected indicators: National Accounts, Price, Production and Labor, Selected period: 2007 – 2016M06 32 The Nation, ―Japan lawmakers approve TPP despite Trump victory‖, http://www.nationmultimedia.com/news/breakingnews/30299673, accessed on November 11th, 2016 33 NCSEIF, “Những thị trường xuất lớn Việt Nam mục tiêu năm 2016”, http://tapchitaichinh.vn/kinh-te-vi-mo/kinh-te-dau-tu/nhung-thi-truongxuat-khau-lon-cua-viet-nam-va-muc-tieu-nam-2016-78355.html, accessed on November 11th, 2016 34 Tradingeconomies, Vietnam Economic Indicators, http://www.tradingeconomics.com/vietnam/indicators, accessed on November 17th, 2016 35 Tradingeconomies, Vietnamesedong, http://www.tradingeconomics.com/vietnam/currency, accessed on November 17th, 2016 36 Vietnam Customs, ―Thương mại hàng hóa Việt Nam - Hoa Kỳ: đối tác thương mại hàng đầu Việt Nam cập nhật 04 tháng đầu năm 2016‖, https://www.customs.gov.vn/Lists/ThongKeHaiQuan/ViewDetails.aspx?ID=933&C ategory=Ph%C3%A2n%20t%C3%ADch%20chuy%C3%AAn%20%C4%91%E1% BB%81&Group=Ph%C3%A2n%20t%C3%ADch, accessed on November 11th, 2016 37 The Vietnam Economy, “Tỷ giá USD/VND 2016 biến động không 4%”, http://vneconomy.vn/tai-chinh/ty-gia-usdvnd-2016-se-bien-dong-khong-qua4-20160118022922456.htm, accessed on November 11th, 2016 38 Vietstock, Dữ liệu kinh tế vĩ mô, http://finance.vietstock.vn/du-lieu-vi- 85 mo/Default.htm, accessed on November 17th, 2016 39 Vu Thanh Tu Anh, “Co che ty gia moi co thuc su moi”, http://cafef.vn/taichinh-ngan-hang/co-che-ty-gia-moi-co-thuc-su-moi-20160106151936288.chn, accessed on November 17th, 2016 40 Worldbank, Inflation, consumer prices (annual %), http://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?locations=VN, accessed on November 05th, 2016 86 APPENDIX DATA DESCRIPTION Unit: EX, IM, TRADE, GDP: USD millions; US GDP: USD billions Time (t) 2007Q1 2007Q2 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 Real Exchange CPI of exchange rate (ER) Vietnam rate (VND/USD) (CPI) (RBER) 16,022 1.20 67.4 16,070 1.20 68.7 16,206 1.19 70.3 16,122 1.15 72.4 16,059 1.07 78.5 16,110 1.01 85.5 16,503 1.00 89.8 16,537 0.97 89.5 16,974 0.98 90.7 16,942 0.98 91.2 16,971 0.98 91.9 17,374 0.99 93.6 18,243 1.00 97.5 18,544 1.01 98.9 18,733 1.01 99.8 18,932 1.02 100.8 19,974 1.00 109.9 20,671 0.98 118.1 Export of Vietnam (EX) Import of Vietnam (IM) 10,565 11,901 12,319 13,528 13,238 17,385 18,027 14,035 14,286 13,572 14,025 15,214 14,346 17,962 18,984 20,366 19,386 22,470 12,277 14,783 15,537 18,100 21,535 23,400 19,578 16,200 12,854 17,416 18,813 20,865 17,775 20,735 21,232 24,037 22,784 25,783 Trade balance of Vietnam (TRADE) -1,712 -2,882 -3,218 -4,572 -8,297 -6,015 -1,551 -2,165 1,431 -3,844 -4,789 -5,652 -3,429 -2,773 -2,248 -3,671 -3,398 -3,313 TRADE RATIO (=EX/IM) 0.86 0.81 0.79 0.75 0.61 0.74 0.92 0.87 1.11 0.78 0.75 0.73 0.81 0.87 0.89 0.85 0.85 0.87 GDP of Vietnam (GDP) 210,878 282,577 293,776 356,211 254,086 371,652 390,765 462,192 311,136 420,464 425,477 488,404 362,895 492,305 508,996 616,718 441,707 628,223 GDP of CPI of USA USA (USGDP) (USCPI) 3,558 3,606 3,642 3,671 3,667 3,703 3,711 3,637 3,596 3,585 3,596 3,642 3,670 3,722 3,764 3,808 3,810 3,865 93.4 95.2 95.5 96.2 97.3 99.4 100.6 97.7 97.2 98.3 98.9 99.1 99.5 100 100.1 100.4 101.7 103.4 87 t 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 ER 20,619 20,775 20,828 20,828 20,828 20,828 20,828 20,834 21,036 21,036 21,036 21,064 21,246 21,246 21,451 21,601 21,848 21,890 21,889 21,886 RBER 0.94 0.93 0.92 0.92 0.92 0.89 0.88 0.88 0.88 0.86 0.86 0.86 0.87 0.86 0.86 0.88 0.89 0.88 0.88 0.87 CPI 122.3 124.4 127.4 128.2 129.2 133.0 136.2 136.7 138.3 140.9 141.9 143.4 144.5 144.8 144.1 144.8 145.1 145.5 146.8 148.9 EX 26,514 26,148 24,874 24,408 30,197 31,979 29,764 31,776 34,733 36,205 33,000 37,579 38,588 40,398 35,618 41,173 42,862 42,408 38,579 43,363 IM 27,309 28,165 24,557 29,082 29,667 31,795 29,485 32,987 33,788 35,000 32,406 37,337 38,163 40,864 35,979 42,065 42,836 41,945 37,381 43,029 TRADE -795 -2,017 317 -4,674 530 184 278 -1,211 945 1,205 594 242 425 -466 -361 -892 26 463 1,198 334 RATIO 0.97 0.93 1.01 0.84 1.02 1.01 1.01 0.96 1.03 1.03 1.02 1.01 1.01 0.99 0.99 0.98 1.00 1.01 1.03 1.01 GDP 640,284 824,794 545,764 706,813 720,208 977,899 683,668 830,435 906,778 1,163,380 756,566 911,612 1,004,792 1,264,886 808,883 970,287 1,072,220 1,341,742 850,315 1,879,873 USGDP 3,897 3,946 3,993 4,030 4,057 4,074 4,119 4,135 4,187 4,250 4,256 4,321 4,392 4,423 4,446 4,500 4,535 4,556 4,570 4,613 USCPI 103.9 103.7 104.5 105.4 105.6 105.7 106.3 106.9 107.3 107 107.8 109 109.2 108.3 107.7 109 109.3 108.8 108.9 110.1 Data source: International Financial Statistics (IFS), www.data.imf.org, Selected period: 2007 – 2016M06: (1) Metadata by Country “Vietnam”: Selected indicators: GDP & Components; Exchange rates; Price, Production and Labor; Trade of Goods; (2) Metadata by Country “United States”: Selected indicators: National Accounts, Price, Production and Labor Note: Base period: 2010Q1 ... ? ?Exchange Rate Policy and Trade Balance: A case study of Vietnam? ?? has reiterated several theories about the exchange rate, exchange rate policy and trade balance, the factors affecting the exchange. .. Exchange rate policy and the trade balance of Vietnam - Overview of exchange rate policy and the trade balance of Vietnam - Empirical study on the impacts of Vietnam? ??s exchange rate policy and. ..MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY DISSERTATION EXCHANGE RATE POLICY AND TRADE BALANCE: A CASE STUDY OF VIETNAM Major: International Trade Policy and Law Full Name: Nguyen