{"id":9186,"date":"2022-07-27T06:54:13","date_gmt":"2022-07-27T06:54:13","guid":{"rendered":"https:\/\/depocen.org\/publications\/who-gains-and-who-loses-from-the-exchange-rate-system-in-vietnam\/"},"modified":"2022-07-27T06:54:13","modified_gmt":"2022-07-27T06:54:13","slug":"who-gains-and-who-loses-from-the-exchange-rate-system-in-vietnam","status":"publish","type":"publications","link":"https:\/\/depocen.org\/vi\/publications\/who-gains-and-who-loses-from-the-exchange-rate-system-in-vietnam\/","title":{"rendered":"Who Gains and Who Loses from the Exchange Rate System in Vietnam?"},"content":{"rendered":"<p>As in many other developing countries, the imposition of foreign exchange controls to<br \/>\nstabilize the nominal exchange rate and a long-lasting dollarisation phenomenon in Vietnam have<br \/>\ncaused an unofficial exchange market to emerge. A de facto system of multiple exchange rates<br \/>\noperates in practice, where official exchange rates coexist with a free market exchange rate.<br \/>\nLiterature on multiple exchange rate (MER) regimes suggests that MERs can serve for<br \/>\nthe balance of payments purpose as well as a method of raising implicit taxes on exporters who<br \/>\nare required to surrender foreign exchange earnings to the central bank through the exchange<br \/>\nsystem. This paper attempts to identify the benefits and costs of the government and economic<br \/>\nsectors under a MER system in Vietnam.<br \/>\nUsing a static partial equilibrium framework modified from Rosenberg and De Zeeuw<br \/>\n(2001) and Hori and Wong (2008), this study estimates the equilibrium exchange rate that would<br \/>\nprevail in a unified exchange market. This rate is more depreciated than the current official rate<br \/>\nby about 5-8 percent in the period 2007-09. Using the estimated equilibrium rates, the net<br \/>\nefficiency losses in the export market are calculated at 6.3 percent, 5.2 percent and 8.5 percent in<br \/>\n2007, 2008 and 2009 respectively while importer market has net efficiency gains. Public<br \/>\nimporters often enjoy higher gains than their private counterparts do. In total, public firms gain<br \/>\n05-0.6 percent of GDP in 2009 from international trade under this exchange rate system while the<br \/>\nprivate sector bears a cost of 0.2 percent of GDP. Unification of these segmented exchange<br \/>\nmarkets would lead to an expansion of trade openness by 27 percent of GDP while narrow trade<br \/>\ndeficit by 0.7 percent of GDP in 2009. Exchange rate reform towards a convertible currency<br \/>\nwould eliminate exchange profits for the government. Therefore, such reform should be gradually<br \/>\nimplemented and coordinated by fiscal adjustment.<\/p>\n","protected":false},"featured_media":0,"template":"","cate_publications":[],"author_publications":[1856],"topic_publications":[],"class_list":["post-9186","publications","type-publications","status-publish","hentry","author_publications-bui-thi-minh-tam"],"acf":[],"_links":{"self":[{"href":"https:\/\/depocen.org\/vi\/wp-json\/wp\/v2\/publications\/9186","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/depocen.org\/vi\/wp-json\/wp\/v2\/publications"}],"about":[{"href":"https:\/\/depocen.org\/vi\/wp-json\/wp\/v2\/types\/publications"}],"wp:attachment":[{"href":"https:\/\/depocen.org\/vi\/wp-json\/wp\/v2\/media?parent=9186"}],"wp:term":[{"taxonomy":"cate_publications","embeddable":true,"href":"https:\/\/depocen.org\/vi\/wp-json\/wp\/v2\/cate_publications?post=9186"},{"taxonomy":"author_publications","embeddable":true,"href":"https:\/\/depocen.org\/vi\/wp-json\/wp\/v2\/author_publications?post=9186"},{"taxonomy":"topic_publications","embeddable":true,"href":"https:\/\/depocen.org\/vi\/wp-json\/wp\/v2\/topic_publications?post=9186"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}