The impact of exchange rate on trade balance in vietnam through import and export performance

International School, Vietnam National University, Hanoi Nante University Program: Master in Finance Banking Insurance (Southeast Asia) Thesis proposal THE IMPACT OF EXCHANGE RATE ON TRADE BALANCE IN VIETNAM (THROUGH IMPORT AND EXPORT PERFORMANCE) Supervisor: Nguyen Van Dinh (Ph.D.,Assoc Prof) Student: Cu Thuy Nga Hanoi, 2018 Acknowledgements I would like to express my deep gratitude to Ph.D.,Assoc Prof Nguyen Van Dinh, who is not only my respectable supervisor but also my academic inspiration I am so thankful for all his guidance, support and encouragement during the period of writing this thesis He gave me a stronger confidence to deal with this dissertation He is a great teacher ever and from the bottom of my heart, I hope that all the best will come to him I would like to thank the Nante University and International school, IS – VNU, to give me a chance that enables me to fulfill the course with all classmates FBA8 and all the lecturers for their useful lessons which make not only my Master course but my life To my family, no word can express all my love to them They have always been my biggest encouragement I could not have finished this course without them Table of Contents CHAPTER 1: INTRODUCTION Background of the problem 1.2 Reasons for researching 1.3 Research objectives 1.4 Research questions 1.5 Research subjects and scope 1.6 Research general structure 1.7 Data and research method CHAPTER 2: LITERATURE REVIEW 2.1 Theory of trade balance 2.1.1 Definition 2.1.2 Factors affecting trade balance 2.2 Theory of exchange rate 10 2.2.1 Definition 10 2.2.2 Factors that influence the exchange rate 13 2.2.3 Impact of exchange rate on import and export performance 14 2.3 Exchange rate system and trade balance 15 2.3.1 Exchange rate system 15 2.3.2 Trade performance 19 2.3.3 Trade balance 23 2.4 Related research 25 CHAPTER 3: DATA 28 3.1 Research data 28 3.1.1 Data availability 28 3.1.2 Descriptive analysis of data 28 3.2 Data analysis procedure 28 CHAPTER 4: MODEL ESTIMATION AND REGRESSION RESULT 30 4.1 Descriptive statistic 31 4.2 Research model regression result 33 4.2.1 Regression model between export – import and the exchange rate 33 4.2.2 Regression between real bilateral exchange rate USD/VND and import-export ratio 36 CHAPTER 5: CONCLUSION 40 5.1 Summary 40 5.2 Limitation of the study 40 Bibliography 42 Appendix 45 Table of Notations and Abbreviations Abbreviation Meaning ASEAN Association of South-East Asian Nations CPI Customer Price Index GDP Gross Domestic Product GSO General Statistics Office EURO European Monetary Unit EXM Export – Import ratio IMF International Monetary Fund JPY Japanese Yen OER Official exchange rate NBER The bilateral nominal exchange rate NEER The bilateral nominal exchange rate REER The real effective exchange rate USA The United Stated of America USD United Stated dollar VND Vietnam Dong LIST OF FIGURES Figure-1: Vietnam’s GDP and import, export from 2001 to 2016 (World Bank) Figure-2: Value of import; export and trade balance 2007-2015 (General Statistics Office of Vietnam) Figure-3: REER index and Ratio Export/Import Figure-4: Regression result between dependent variables “export” and independent variables nominal exchange rate VND/USD “rate” Figure-5: Regression result between dependent variables “import” and independent variables nominal exchange rate VND/USD “rate” Figure-6: Regression between real bilateral exchange rate VND/USD and importexport ratio Figure-7: Regression between real bilateral exchange rate VND/USD and importexport ratio LIST OF TABLES Table-1: Vietnam’s exchange rate regime from 1999 – 2015 Table-2: Vietnam's leading partners in international merchandise trade Table-3: International merchandise trade of FDI enterprises (Customs Handbook on International merchandise trade statistics of Vietnam 2015) Table-4: Summary of data Table-5: REER index and Ratio Export/Import ABTRACT This paper aims to determine whether exchange rate stability of Vietnam or not, especially in the period from 2008 to 2015 Besides, this study used the available date from 2000 to 2015 to calculate the real effective exchange rate From that, the research attempts to identify the relationship between the exchange rate of Vietnam dong against United Stated dollar and individual trade, import and export Also, the method of ordinary least squares is used to estimate equation of explanatory variables ( GDP US, GDPVN, RERVND/USD ) for explained variable ( EXM -export over import ratio) It exhibits a significant relationship, which is highly sensitive A change one basic point in Vietnam dong can increase in thousands of USD Other important result is that the real exchange rate is an important variable to trade balance, and depreciation of exchange rate has a positive impact on exports Key words: Import, export, trade balance, real exchange rate, ordinary least squares CHAPTER 1: INTRODUCTION Background of the problem Exchange rate is one of the important macroeconomic policies of every nation The exchange rate between USD and EURO, USD and JPY, as well as exchange rate fluctuations between USD / VND in recent times shows that the exchange rate is always an acute issue In Vietnam, the exchange rate affects not only trade balance, import and export, national debt, direct investment, but also the public's confidence On February 11, 2011, State Bank of Vietnam decided on the adjustment interbank exchange rate to 20.693 VND, increased 9.3% compare with 18.932VND (State Bank of Vietnam, 2009) This is the move in order to stabilize macro-economy and curb inflation As of 2015, the State Bank of Vietnam announced to keep the exchange rate stable, the margin was anchored at no more than 2% However, within just over a month, the State Bank raised the exchange rate by 1% to 21.458VND per dollar due to the signs of recovery for the US economy The trading band has been adjusted many times to intensify the flexibility of market exchange rate There were two periods that the band fluctuate the most The first one was in 2009 due to global financial crisis (the band was widened to +/- 5%), the second was in 2015, under a lot of pressure from international market and decision of Fed raising Fed funds rates Along with that, the exchange rate that varies over a short period of time also have no small effect on all economic sectors need to use foreign currency, especially in import and export Obviously, import and export activities play a vital role in development of Vietnam’s economy These is also considered by a lot of countries, especially developing countries, because this is the most direct way to increase the accumulation of wealth, to solve the debt burden for most countries in the world Understanding this important role, from small to large countries with high or low level development start entering a new race to promote import-export activities, and the exchange rate is the most effective tool to optimize the purpose However, the exchange rate is one of the most sensitive macroeconomic variables Exchange rate movement is unpredictable due to the impact of many factors such as trade deficit in both short-term and medium-term, the level of the budget deficit appeared to be quite high, around percent of GDP, the increase in gold price, high demand in foreign currency especially USD The appreciation or depreciation of the currency affects the import-export turnover and the trade balance Using the exchange rate tool to run a flexible economy in the current context is necessary However, how to adjust and conduct the exchange rate policy is also a problem To achieve this goal, policymakers must be cautious and firmly set the regulations of the law on goods and currency mobilization in the current situation of our country dominated by a number of countries with developed economies 1.1 Research statement Exchange rate has played a very important role in international trade, especially in such a great open world economy It fluctuates day by day and affects not only trade balance, import and export, national debt, direct investment, but also the public's confidence Exchange rate adjustments can directly influent in social and economic problems trade balance in Vietnam For example, when the authority adjusts the exchange rate, they will have to face other unexpected impacts, given that there has existed high and long-term trade balance deficit and budget deficit that make the balance of payment unstable Therefore, exchange rate policy is always the primary concern of Vietnamese government in order to stimulate export, reduce imports, and guaranteeing macroeconomic stability and preventing inflation For enterprises engaged in import and export activities, understanding and making good use of exchange rate will help to respond promptly to exchange rate movement and to reduce the risks of doing business 1.2 Reasons for researching The balance of trade compares the value of a country's exports of goods and services against its imports When exports are greater than imports, this is a trade surplus Most nations view that as a favorable trade balance Therefore, a lot of countries try to create It indicates that raising one unit in real bilateral exchange rate between USD and VND, 24.84 percent increase in export import ratio All of the coefficients are statistically significant at small level, but the explanatory power of this regression is substantially high with R-squared of 55.48% More than forty percent of other factors may be important in explaining the variable export – import ratio In summary, the results show that the fluctuation of the US dollar compared to Vietnam dong can affect on export and import value Besides, the movement in the exchange rate between USD and VND also influent on the export – import ratio or the trade balance in Vietnam For instance, the devaluation of VND against US dollar can enhance the Vietnam’s competitiveness and increase the tendency of export because export commodities are relatively cheaper in global marketplace and imported goods are expensive in domestic market 39 CHAPTER 5: CONCLUSION 5.1 Summary Objective of this study is to examine the impact of exchange rate changes on the balance trade through the export and import performance in Vietnam case For this purpose, real effective exchange rate of Vietnam dong compared to foreign currency in basket of main trading partners was estimated based on using the data sources of import and export value, CPI index, bilateral nominal exchange rate, bilateral real exchange rate from 2000 to 2015 The increase and decrease in real effective exchange rate can effect on the merchandise import and export The decrease in REER implies that imports become more expensive and exports become cheaper The increase or decrease in real exchange rate did not affect immediately on the trade balance in that year but impact more slowly Also, the method of ordinary least squares to test the single regression between import, export value and exchange rate USD/VND through the data source in quarterly from 2008 to 2015 The finding of this research shows that there is a positive relationship between variables “import”; “export and the exchange rate Besides, using regression model of Mohsen Bahmani – Oskooee and Tatchawan Kantipong with explanatory variables ( GDPUS, GDPVN, RERVND/USD ) and explained variable ( EXM - export over import ratio) to verify the real bilateral exchange rate USD/VND and import-export ratio The paper shows empirically that ratio import and export is highly sensitive in the real bilateral exchange rate of Vietnam dong against US dollar Other important result is that the real exchange rate is an important variable to trade balance, and depreciation of exchange rate has a positive impact on exports 5.2 Limitation of the study Information availability necessarily constrained the choice of data This study is limited in a way that some important data is not available Most of the data did not exist in extant sets and many of the extant datasets were incomplete Due to the lack of past data on customer price index with preceding year equal to 100 in several years and the exchange rate ratio between CNY or TWD and VND, the study 40 met the difficulty in calculating bilateral real exchange rate More important, in the regression model, the exchange rate ratio between VND and USD has been used However, sometimes this ratio does not perfectly represent the true NEER Hence, the result might be different if NEER is used Furthermore, the narrow band of fluctuation of nominal VND/USD pegged by the State Bank of Vietnam to keep the stable value of the Vietnamese currency for foreign trade is also a limitation of using this ratio as a measure 41 Bibliography (n.d.) 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Retrieved 11 30, 2017, from World Bank: https://wits.worldbank.org/CountryProfile/en/Country/VNM/Year/2015/TradeFlow /EXPIMP 44 Appendix Appendix 1: Real effective exchange rate of VND compared to foreign currency in basket (2000 - 2015) USD Mil Period from 2000 to 2007 Export (2000-2007) China United States of America Republic of Korea Japan Taiwan Germany Thailand Singapore Import China United States of America Republic of Korea Japan Taiwan Germany Thailand Singapore 2000 1536.4 732.8 532.6 2575.2 756.6 730.3 567.9 885.9 8317.7 2001 1417.4 1065.3 561.4 2509.8 806 721.8 699.3 1043.7 8824.7 2002 1518.3 2452.8 677.8 2437 817.7 729 762.4 961.1 10356.1 2003 1883.1 3938.6 567.3 2908.6 749.2 854.7 795.7 1024.7 12721.9 2004 2899.1 5024.8 608.1 3542.1 890.6 1064.7 874.9 1485.3 16389.6 2005 3228.1 5924 663.6 4340.3 935 1085.5 863.1 1917 18956.6 2006 3242.8 7845.1 842.9 5240.1 968.7 1445.3 930.2 1811.7 22326.8 2007 3356.7 10089.1 1252.7 6069.8 1139.4 1855.1 1033.9 2202 26998.7 1401.1 363.4 2296.7 2300.9 1879.9 295.2 810.9 2694.3 12042.4 20360.1 1606.2 410.8 2338.4 2183.1 2008.7 396.7 792.3 2478.3 12214.5 21039.2 2158.8 458.3 2279.6 2504.7 2525.3 558.1 955.2 2533.5 13973.5 24329.6 3138.6 1143.3 2625.4 2982.1 2915.5 614.6 1282.2 2875.8 17577.5 30299.4 4595.1 1133.9 3359.4 3552.6 3698.3 694.3 1858.6 3618.4 22510.6 38900.2 5899.7 862.9 3594.1 4074.1 4304.2 661.9 2374.1 4482.3 26253.3 45209.9 3242.8 987 3908.4 4702.1 4824.9 914.5 3034.4 6273.9 27888 50214.8 3356.7 1699.7 5334 6177.7 6916.6 1308.5 3737.2 7608.6 36139 63137.7 45 3.Weight China United States of America Republic of Korea Japan Taiwan Germany Thailand Singapore 14.43% 5.38% 13.90% 23.95% 12.95% 5.04% 6.77% 17.58% 14.37% 7.02% 13.78% 22.31% 13.38% 5.32% 7.09% 16.74% 15.11% 11.97% 12.16% 20.31% 13.74% 5.29% 7.06% 14.36% 16.57% 16.77% 10.54% 19.44% 12.09% 4.85% 6.86% 12.87% 19.27% 15.83% 10.20% 18.24% 11.80% 4.52% 7.03% 13.12% 20.19% 15.01% 9.42% 18.61% 11.59% 3.87% 7.16% 14.15% 12.92% 17.59% 9.46% 19.80% 11.54% 4.70% 7.90% 16.10% 10.63% 18.67% 10.43% 19.40% 12.76% 5.01% 7.56% 15.54% CPI index China United States of America Republic of Korea Japan Taiwan Germany Thailand Singapore Vietnam 100.4 103.4 102.3 99.2 101.3 101.45 101.7 101.3 98.4 100.7 102.8 104.1 99.3 100 101.98 101.6 101 99.66 99.2 101.6 102.8 99.1 99.8 101.4 100.6 99.6 103.9 101.2 102.3 103.5 99.7 99.7 101.04 101.8 100.5 103.1 103.9 102.7 103.6 100.0 101.6 101.7 102.8 101.7 107.8 101.8 103.4 102.8 99.7 102.3 101.5 104.5 100.5 108.3 101.5 103.2 102.2 100.3 100.6 101.6 104.7 101.0 107.5 104.8 102.8 102.5 100.0 101.8 102.3 102.3 102.1 108.3 CPI base year 2000 China United States of America Republic of Korea Japan Taiwan 100.00 100.00 100.00 100.00 100.00 100.70 102.80 104.10 99.30 100.00 99.89 104.44 107.01 98.41 99.80 101.09 106.85 110.76 98.11 99.50 105.04 109.73 114.75 98.11 101.09 106.93 113.46 117.96 97.82 103.42 108.53 117.09 120.56 98.11 104.04 113.74 120.37 123.57 98.11 105.91 46 Germany Thailand Singapore Vietnam 6.VND/ Foreign currency China United States of America Republic of Korea Japan Taiwan Germany Thailand Singapore 100.00 100.00 100.00 100.00 101.98 101.60 101.00 99.66 103.41 102.21 100.60 103.55 104.49 104.05 101.10 106.76 106.23 106.96 102.82 115.08 1759.73 14514 11.53 127.34 441.93 13722.6 336.01 8405.08 1910.92 15084.0 12.04 120.49 450.17 13996.10 357.83 8539.38 1934.78 15406.0 13.38 130.98 458.57 16237.80 363.70 8958.71 1954.35 15647.0 13.53 147.42 474.06 19744.1 402.80 9264.62 1909.88 15778.00 15.40 154.64 493.92 21604.50 412.52 9721.98 107.88 111.78 103.33 124.64 109.58 117.03 104.37 133.98 112.09 119.72 106.56 145.10 1971.60 2138.89 15915.0 16051.0 15.98 18.19 136.08 136.00 484.10 511.91 18961.63 21234.00 396.00 460.00 9637.30 10550.00 2231.80 16030.0 17.42 143.96 500.89 23784.54 567.32 11190.63 Bilateral nominal exchange rate (NBER) China 100.000 108.592 United States of America 100.000 103.927 Republic of Korea 100.000 104.361 Japan 100.000 94.621 Taiwan 100.000 101.864 Germany 100.000 101.993 Thailand 100.000 106.493 Singapore 100.000 101.598 109.948 106.146 115.991 102.862 103.766 118.329 108.241 106.587 111.060 107.806 117.286 115.772 107.271 143.880 119.878 110.226 108.533 108.709 133.491 121.442 111.763 157.437 122.771 115.668 112.040 109.653 138.545 106.867 109.542 138.178 117.854 114.661 121.546 110.590 157.743 106.804 115.835 154.737 136.901 125.519 126.826 110.445 151.048 113.055 113.342 173.324 168.841 133.141 Bilateral real exchange rate (RBER) China 100.000 United States of America 100.000 Republic of Korea 100.000 Japan 100.000 106.069 107.066 119.876 97.775 105.168 107.897 121.685 106.397 99.057 103.653 133.101 103.532 96.120 99.823 131.125 82.871 98.456 96.649 141.935 78.208 99.413 91.621 128.631 76.441 109.725 107.202 109.010 94.280 47 Taiwan Germany Thailand Singapore REER 100.000 100.000 100.000 100.000 100.000 102.211 104.365 108.566 102.964 103.500 VND/ foreign currency according to REER China 1759.73 1846.30 United States of America 14514.00 14573.89 Republic of Korea 11.53 11.63 Japan 127.34 116.42 Taiwan 441.93 434.95 Germany 13722.6 13522.78 Thailand 336.01 345.73 Singapore 8405.08 8250.59 100.011 118.169 106.846 103.549 105.683 99.980 140.820 116.838 104.385 109.406 98.176 145.326 114.107 103.340 107.681 90.893 119.607 105.694 95.062 98.344 89.946 126.558 119.578 97.772 100.139 82.728 133.892 139.306 97.772 98.908 2256.43 16206.92 17.61 145.55 506.42 24047.04 573.58 11314.14 1830.75 14577.61 12.66 123.94 433.91 15364.69 344.14 8477.00 1786.33 14301.78 12.37 134.75 433.30 18046.64 368.17 8468.11 1773.65 14652.57 14.30 143.61 458.69 20063.47 383.10 9028.52 2004.79 2135.91 16182.91 16028.65 16.25 18.16 138.37 135.81 492.25 511.20 19280.83 21204.43 402.67 459.36 9799.53 10535.31 2010 7308.8 14238.1 3092.2 7727.6 1442.8 2372.7 1182.8 2121.3 2011 11125.0 16927.7 4715.4 10781.1 1843.3 3366.9 1792.2 2285.6 2012 12388.2 19667.9 5580.4 13059.8 2081.7 4095.2 2832.2 2367.9 2013 13259.4 23869.2 6631.1 13651.5 2213.6 4729.7 3103.7 2662.3 Period from 2008 to 2015 Export (2008-2015) China United States of America Republic of Korea Japan Taiwan Germany Thailand Singapore 2008 4535.7 11868.5 1784.4 8537.9 1401.4 2073.4 1348.9 2659.7 2009 4909.0 11355.7 2064.5 6291.8 1120.6 1885.4 1266.1 2076.3 48 2014 14928.3 28634.7 7167.5 14674.9 2306.5 5174.9 3475.5 2942.0 2015 16567.7 33451.0 8915.4 14100.3 2076.4 5707.4 3177.7 3256.6 34209.9 30969.4 39486.3 52837.2 62073.3 70120.5 79304.3 87252.5 4535.7 2635.3 7066.3 8240.7 8362.6 1480 4905.6 9392.5 46618.7 80828.6 16441 3009.4 6976.4 7468.1 6252.6 1587.3 4517.1 4248.4 50500.3 81469.7 2001.9 3766.9 9761.3 9016.1 6976.9 1742.4 5602.3 4101.1 42968.9 82455.2 24593.7 13175.9 13175.9 10400.3 8556.8 2198.6 6383.6 6390.6 84875.4 137713 28785.8 4827.2 15535.9 11602.8 8534.2 2377.4 5792.3 6690.3 84145.9 146219.2 36954.3 5231.9 20697.9 11611.6 9423.7 2963.1 6311.2 5702.6 98896.3 169017 43647.6 6286.9 21728.5 12857 11063.6 2606.6 7053.3 6834.7 112078.2 191382.5 49458 7785 27578.5 14225 10951.3 3219.2 8275.5 6038.3 127531 214783 3.Weight China United States of America Republic of Korea Japan Taiwan Germany Thailand Singapore 11.22% 17.94% 10.95% 20.76% 12.08% 4.40% 7.74% 14.91% 26.21% 17.63% 11.10% 16.89% 9.05% 4.26% 7.10% 7.76% 11.29% 21.84% 15.59% 20.31% 10.21% 4.99% 8.23% 7.55% 25.94% 21.86% 12.99% 15.38% 7.55% 4.04% 5.94% 6.30% 28.16% 16.75% 14.44% 16.87% 7.26% 4.43% 5.90% 6.19% 29.71% 17.22% 16.17% 14.95% 6.89% 4.55% 5.57% 4.95% 30.61% 18.25% 15.10% 14.39% 6.99% 4.07% 5.50% 5.11% 30.74% 19.20% 16.99% 13.19% 6.07% 4.16% 5.33% 4.33% CPI index China United States of America Republic of Korea Japan Taiwan 105.9 103.8 104.67 101.38 103.5 99.3 114.4 113.0 100.7 102.6 103.3 116.5 105.6 100 103.6 105.4 119.9 104.6 99.8 105.0 102.6 121.7 102.1 99.7 106.9 102.6 122.8 103.5 101.3 107.7 102 125.2 104.8 102.8 108.9 101.4 126.6 104.3 103.6 108.7 Import China United States of America Republic of Korea Japan Taiwan Germany Thailand Singapore 49 Germany Thailand Singapore Vietnam CPI base year 2000 China United States of America Republic of Korea Japan Taiwan Germany Thailand Singapore Vietnam 6.VND/ Foreign currency China United States of America Republic of Korea Japan Taiwan Germany Thailand Singapore 102.6 105.5 106.5 123.0 101.8 106.2 108.5 106.9 103.7 105.8 110.6 109.2 105.6 106.7 110.2 118.6 106.9 108.6 109.8 109.7 108.1 109.3 112.3 106.6 107.3 111.4 111.6 104.1 109.6 101.4 112.3 100.6 120.45 124.99 129.34 99.46 109.62 115.04 126.31 113.48 178.43 119.61 142.99 146.15 100.16 112.47 117.11 134.14 123.13 190.74 123.55 166.58 154.34 100.16 116.52 121.44 141.92 136.18 208.29 130.23 199.73 161.44 99.96 122.34 128.24 151.43 150.07 247.03 133.61 243.07 164.83 99.66 130.79 137.09 164.45 164.77 270.99 137.09 298.49 170.60 100.95 140.86 148.20 179.75 185.04 288.88 139.83 373.71 178.79 103.78 153.39 159.02 200.24 206.51 300.72 141.78 473.12 186.47 107.51 166.74 174.28 203.04 231.91 302.53 3342.28 21036.00 20.44 275.53 694.60 27699.67 684.35 16520.30 3347.35 20855.0 21.72 244.25 717.78 27754.61 696.36 17201.00 3464.83 21125.0 22.23 202.24 708.18 29266.24 656.93 16836.97 3509.00 21405.0 22.18 182.35 703.26 26479.68 672.83 16559.42 3507.00 22540.0 19.22 187.86 680.57 24708.30 636.91 16025.99 196.896 145.549 199.406 147.478 199.292 155.298 2596.05 17486.0 14.06 195.66 539.80 25000.88 519.35 12279.10 2706.75 18479.0 17.86 203.29 577.65 26963.0 572.51 13387.9 Bilateral nominal exchange rate (NBER) China 153.20 153.816 United States of America 124.651 127.318 2877.04 19500.0 20.44 256.55 668.49 27835.59 705.31 16229.00 163.493 134.353 50 189.931 144.936 190.220 143.689 Republic of Korea Japan Taiwan Germany Thailand Singapore 114.403 142.428 120.734 177.348 120.734 145.546 154.900 159.643 130.711 196.486 170.385 159.284 177.277 201.469 151.266 202.845 209.907 193.086 177.277 216.373 157.174 201.854 203.670 196.551 188.378 191.809 162.419 202.255 207.244 204.650 192.801 158.819 160.247 213.270 195.509 200.319 192.368 143.199 159.134 192.964 200.241 197.017 166.696 147.526 154.000 180.056 189.551 190.670 Bilateral real exchange rate (RBER) China 103.418 United States of America 87.319 Republic of Korea 82.927 Japan 79.393 Taiwan 74.170 Germany 114.340 Thailand 98.261 Singapore 92.566 REER 88.228 96.452 95.444 118.691 83.827 77.073 120.638 119.825 102.819 98.040 96.981 107.450 131.359 96.876 84.619 118.269 143.024 126.237 110.401 100.125 117.184 115.853 87.551 77.842 104.791 124.849 119.401 105.151 93.786 128.884 114.579 70.536 78.387 102.319 125.766 124.434 101.792 93.435 150.393 113.859 55.501 78.136 109.410 121.650 128.314 103.846 92.718 183.274 114.367 49.417 81.171 102.036 133.332 135.291 110.262 93.402 242.870 102.749 52.429 84.877 103.728 127.217 146.160 122.281 3288.43 3336.51 3182.41 20487.88 20342.62 19412.79 21.34 21.41 20.12 239.95 194.75 165.38 705.14 681.95 637.81 27266.04 28182.34 24015.15 684.10 632.60 610.21 16898.21 16213.40 15018.20 2867.98 18432.92 15.72 153.63 556.56 20206.13 520.86 13105.85 VND/ foreign currency according to REER China 2942.43 2760.85 United States of America 19819.06 18848.34 Republic of Korea 15.94 18.22 Japan 221.77 207.35 Taiwan 611.82 589.20 Germany 28336.61 27501.94 Thailand 588.64 583.95 Singapore 13917.43 13655.52 2605.98 17662.82 18.51 232.38 605.51 25213.08 638.86 14700.00 51 3178.54 20005.45 19.44 262.03 660.57 26342.67 650.82 15710.98 Appendix ln(EXM)= α1 + α2Ln GDP US + α3Ln GDP VN + α4Ln RER US + ε1 Impact of real effective exchange rate on export - import ratio Year (Bil) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 GDP US (1) 10,284.80 10,621.80 10,977.50 11,510.70 12,274.90 12,274.90 13,855.90 14,477.64 14,718.58 14,418.74 14,964.37 15,517.93 16,155.26 16,691.52 17,393.10 18,036.55 GDP VN(2) 31.173 32.685 35.064 39.553 45.428 57.633 66.372 77.414 99.13 106.02 115.93 135.54 155.82 171.22 186.21 193.24 Export 14.449 15.027 16.706 20.176 26.504 32.442 39.826 48.561 62.685 57.096 72.237 96.906 114.529 132.033 150.217 162.017 Import 15.635 16.162 19.733 25.227 31.954 36.978 44.891 62.682 80.714 69.949 84.839 106.75 113.78 132.032 147.852 165.57 (1) https://tradingeconomics.com/united-states/gdp (2) https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=VN 52 REER 100.0 100.0 103.5 105.7 109.4 107.7 98.3 100.1 98.9 88.2 98.0 110.4 105.2 101.8 103.8 110.3 EXM 0.92414 0.92977 0.84660 0.79978 0.82944 0.87733 0.88717 0.77472 0.77663 0.81625 0.85146 0.90778 1.00658 1.00001 1.01600 0.97854 Appendix 3: Export, import value and exchange rate VND/USD in quarterly Quarterly Q1 - 2008 Q2 - 2008 Q3 - 2008 Q4 - 2008 Q1 - 2009 Q2 - 2009 Q3 - 2009 Q4 - 2009 Q1 - 2010 Q2 - 2010 Q3 - 2010 Q4 - 2010 Q1 - 2011 Q2 - 2011 Q3 - 2011 Q4 - 2011 Q1 - 2012 Q2 - 2012 Q3 - 2012 Q4 - 2012 Q1 - 2013 Q2 - 2013 Q3 - 2013 Q4 - 2013 Q1 - 2014 Q2 - 2014 Q3 - 2014 Q4 - 2014 Q1 - 2015 Q2 - 2015 Q3 - 2015 Q4 - 2015 Export 12175980.0 18450303.8 18047230.3 14011615.6 14135846.1 13460768.5 13989621.6 15510038.3 14456914.9 18008871.2 19060487.9 20665605.1 19636997.9 23424246.1 26670481.0 31023164.2 24805796.3 28527471.7 30216307.4 31023164.2 29763293.4 31775955.6 34733540.2 35862120.2 33535544.8 37572123.8 38767493.9 40341976.3 36390826.0 41301174.5 42458518.7 41866393.7 Import 20974105.6 23862590.1 19427932.0 16449201.4 12634943.8 17098983.5 18735295.4 21479587.3 17856607.4 20902708.9 21168299.2 24873583.4 23134246.0 26365751.5 27821757.9 29428098.2 24581521.9 28909778.2 29915645.9 30385464.7 29485165.9 32987163.1 33787843.8 35865309.8 32452113.9 37148723.8 38008004.7 40240239.2 39056637.8 42177561.2 43360441.5 41819054.5 53 VND/USD 16,120 16,846 16,610 17,495 17,819 17,802 17,844 17,479 19,100 19,050 19,500 19,505 20,900 20,640 20,834 21,036 20,860 20,920 20,900 20,860 20,828 21,036 21,036 21,036 21,036 21,246 21,246 21,405 21,480 21,780 22,455 22,530 ... following: - The theoretical basis on the impact of exchange rates on trade balance - The relationship between exchange rates and trade balance - Exchange rate policy of Vietnam - Import and export. .. looks back on policies of exchange rate of Vietnam in the past and analyze the impact of the adjustment of the exchange rate on Vietnam? ??s export through the relationship between export and export. .. average inter-bank exchange rate and restricting the band of exchange rate On the basis of this exchange rate anchoring policy, the official exchange rate and the fluctuation band change in different