Study Of The Relationship Between Vietnam’s Currency And The Balance Of International Payments

Since2000, depreciation of Vietnam dun has become important issue influencingthe economic development of Vietnam and economic relations with the outside world.Be different from many positive effects brought by devaluation in some otherdeveloping countries, Vietnamese economy is suffering many negative effects broughtby devaluation,which is because that the economic development is not mature enoughand export structure is unbalanced. On the basis of balance of payments of Vietnam,this article is analyzing how the depreciation of Vietnam dun is influencing the currentaccount and capital account of Vietnam. Then this article will put forward somesuggestions and countermeasure.Based on the theory of exchange rate, the theory of balance of payments andtheory of exchange rate affecting balance of payments, Firstly, this article is analyzingthe reason of deficit in Vietnamese international payments between2000and2010,which will be proved with international payments data from2000to2010fromwebsite of Vietnam Statistical Bureau. According to these specific data this article isdeeply analyzing the reason of disequilibrium of balance of payment and therelationship between disequilibrium of balance of payment and devaluation of Vietnamdun. Secondly, this article is more specific analyzing the negative influence ofdevaluation to economy from different corner. This article not only is showing thepresent situation of balance of payment in Vietnam with data but also applyingeconometrics software on empirical analysis in order to explain the relationshipbetween disequilibrium of balance of payment and devaluation of Vietnam dun.Thirdly, this article is deeply analyzing negative effects of devaluation to balance ofpayments. Finally, this article will put forward some suggestions and countermeasurethrough summarizing.