Currency Policy - International Experiences and Lessons for Vietnam
Keywords:independent monetary policy (monetary independence), world trade organization(WTO), full capital controls, impossible trinity
In recent times, Vietnam has been successful in maintaining a currency policy aimed at stabilizing the exchange rate, macroeconomic stability, and inflation remained at a low number. In 2012, Vietnam exported 284 million dollar trade, balance of payments surplus of 9.1 billion dollars, foreign exchange reserves doubled to reach about 30 billion dollars. Vietnam and other countries are faced with the globalization of the financial markets in 1990-2000, thereby reducing the stability of the exchange rate and policy autonomy of states. An unintended consequence of financial globalization is the loan with the costly expense of developing countries and the debt crisis. Countries with emerging markets responded by choosing monetary policy with the aim of controlling cash flow for the three policy impossible, integrate their finances with rising foreign exchange reserves, as self-insurance means the integration into the global financial system. Policy impossible trilogy (the ability to perform only two of the three policy goals - free flow of capital, exchange rate stability and an independent monetary policy) continues to be a model of management policy in macroeconomics. This article, the authors use the model impossible trinity of Robert Mundell and Marcus Fleming model (Mundell - Fleming) to explain the objectives of monetary policy Vietnam period before the WTO (1990 -2007), and after joining the WTO (2007 - present). The author updates the national experience of the world and draw lessons options for monetary policy in Vietnam in the coming time.
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