CNY addition to IMF currency basket has little impact on Vietnam

Hanoi (VNA) – The recent inclusion of the Chinese yuan (CNY) to the reserve currency basket of the International Monetary Fund (IMF) will not have any significant impacts on Vietnam’s economy, experts said, adding that it takes at least six months or even a year to see any impacts.

Director of the Institute for Informatics Research and Applied Economics Dinh The Hien said Vietnam has traditionally used USD and EUR as foreign currencies. USD is usually used in trade between Vietnam and China.

With the addition of the VNY to the IMF basket of reserve currencies and Special Drawing Rights basket besides the USD, EUR, GBP and JPY, some Vietnamese businesses will become more likely to directly use yuan in transactions with Chinese partners, he said.

To some extent, this might be beneficial for Vietnam-China trade, he commented, citing the fact that recently Vietnam has boosted commercial activities with China and Russia by using their respective currencies.

With a population of nearly 1.4 billion, China is currently a big, promising market for multiple nations around the world, including Vietnam.

However, over the next few years USD will remain an important part of the Vietnamese monetary market, he noted.

Nguyen Tri Hieu, a banking and finance expert, said Vietnamese businesses could become more proactive in payments and transactions with Chinese partners when the yuan becomes more widely used around the world.

However, he warned about certain risks to Vietnam’s monetary policy and the commitment to maintaining stable exchange rates if the CNY continues to be devalued.

General Secretary of the Vietnam Banks Association Tran Thi Hong Hanh said the banking sector has predicted the devaluation of the yuan and prepared some solutions. The State Bank of Vietnam will keep its pledge to stabilise the exchange rate between VND and USD, she added.

Businesses have been advised to use effective, less risky forms of payment and look toward the new global payment standards. Thereby, the influence of the yuan’s addition to the IMF reserve currency basket on the Vietnamese market and businesses is not worrisome, Hanh said.

Vietnam Rubber Group Director General Tran Ngoc Thuan said Vietnamese firms use both USD and CNY in trade with China. However, before deciding on payment methods with Chinese partners, Vietnamese enterprises will weigh the pros and corns of the two currencies, he noted.-VNA