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Interview: Greater role of RMB will better support development of Vietnam-China economic ties: Vietnamese economist

Xinhua, September 22, 2016 Adjust font size:

"The greater role of the Chinese currency renminbi (RMB) in the world market will offer positive support to the development of Vietnam-China trade, economic, investment and financial ties," said a renowned Vietnamese economist.

Dr. Vu Dinh Anh, a Vietnamese economist, made the remarks in a recent interview with Xinhua in Vietnam's capital Hanoi.

The International Monetary Fund (IMF) has decided to include the RMB in the Special Drawing Rights (SDR) basket as a fifth currency, along with the U.S. dollar, the euro, the Japanese yen and the pound sterling, effective Oct. 1, 2016.

According to Anh, the economic and financial ties between Vietnam and China have been developing rapidly.

"In terms of trade, China is the largest market for Vietnamese imports and among the top markets for Vietnamese exports. In addition, investment activities and financial and other monetary ties between the two countries have also flourished," Anh said.

Given its upcoming inclusion into the IMF's SDR, the expert said, "The RMB will become a strong currency worldwide."

"In the near future, the RMB will join other main currencies in the world like the U.S. dollar, euro, and the Japanese yen, to be commonly used in transactions of Vietnamese companies with foreign countries," said the expert, predicting an ever-increasing role of the RMB in Vietnam-China economic and financial relations.

"The RMB will play a role as important as that of major currencies used in the past," Anh stated.

Among Vietnamese companies, Anh said the RMB has been used as an international payment currency and will continue to be used with an expanding role.

"For example, in relations with Chinese or foreign companies, instead of using the U.S. dollar or the euro, Vietnamese companies will be able to use the RMB as payment currency," the expert said.

Also, the currency may be used in investment projects by Chinese investors or in Chinese loans to Vietnam, Anh elucidated.

"I think there will be a closer link between investment inflows, both direct and indirect, by Chinese investors in Vietnam and the RMB forthwith," said Anh.

The economist went on to explain that both countries want to reduce bilateral trade imbalance, expressing his hope that, "With the greater role of the RMB, exchange rates between it and the Vietnamese dong (VND), as well as between the RMB and other key currencies, will be well managed to help narrow the gap in the trade relations between Vietnam and China."

The expert also proposed the two countries pay more attention to the management of the exchange rate policy between their respective currencies as well as to keep an eye on cross-linkages of exchange rates between the RMB and other major currencies. Endit