Evaluate some issues of current exchange rate policy

Abstract

In the period 2011-2014, the exchange rate is relatively stable and has contributed to the party's macroeconomic stability. However, keeping a fixed exchange rate for a long time is putting forward a number of issues such as: (i) What is the real value of the rising VND that affects the competitiveness of Vietnamese exports? , In the condition that foreign exchange reserves are increasing, should the exchange rate be adjusted? (ii) the exchange rate is stable but at certain times the exchange rate is pushed up, can the current mechanism limit such behavior? (iii) In the context of deepening economic integration, commitments to open capital account are gradually approaching the relationship between exchange rate regulation and monetary policy. How to choose between exchange rate stability and independence of monetary policy? This article assesses some of the risks of the current exchange rate regime and suggests some short- and medium-term solutions.