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Mid-Term Test (KTQT2)

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Phương Linh Sỹ
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17 views1 page

Mid-Term Test (KTQT2)

Uploaded by

Phương Linh Sỹ
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Select TWO OF THREE questions bellow

1. Should the current account deficit be a cause for an alarm for policy-makers? Describe and
present the current situation of balance of payments in Vietnam since 2010? Propose
solution(s) to improve the deficit in current account in Vietnam.
2. How can exchange rate be determined in exchange rate regimes? Describe the exchange rate
regime in Vietnam?
3. Use the data on Vietnam’s 2009 international transactions in the below table and answer the
following questions
Table 1: Vietnam’s International Transactions, 2009 (Unit: billions U.S. dollars)
B. Capital and financial account
A. Current account balance balance
Trade in goods Direct investment (net) 6.9
Foreign investment in Vietnam,
Exports, f.o.b. 57.1 liabilities 7.6
Imports, f.o.b. -64.7 Vietnam's investment abroad, assets -0.7
Trade in services Portfolio investment (net) -0.1
Exports 5.8 Medium - and long-term loans 4.5
Imports -8.2 Disbursements 6.1
Investment incomes ODA loans 6.9
Receipts 0.8 Commercial loans -0.8
Payments -3.8 Debt payments -1.7
Unilateral transfers Short-term capital (net) -4.5
Private (net) 6 C. Errors and omissions -9
Official (net) 0.4 D. Balance of Payments
E. Changes in international reserves
Source: IMF Staff Report
a. Calculate Vietnam’s current account balance, financial and capital account balance, the
official settlement balance (or the balance of payment in short), and the changes in the
official reserve assets. Explain your calculations.
b. Based on the economic situation in 2009, discuss the disequilibrium (surplus or deficits) in
the current account balance, financial account balance, and the balance of payment.
c. Using the graph of the basic exchange rate determination model, discuss what the State
Bank of Vietnam (SBV) would do to maintain the fixed exchange rate. How would the
exchange rate between dong and dollars change if the SBV did not intervene in the foreign
exchange market?

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