Fixed Exchange Rate, Export Promotion, and Foreign Exchange Reserves Accumulation: A Feasible Path for Vietnam to Achieve Economic Center Status

Jiayi You ()
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Jiayi You: Zhejiang University, School of Economics

A chapter in Proceedings of the 2025 International Conference on Financial Innovation and Marketing Management (FIMM 2025), 2025, pp 684-691 from Springer

Abstract: Abstract This paper explores the path for Vietnam’s transition from an ″economic periphery″ to an ″economic center″, focusing on the synergistic effects of its fixed exchange rate policy, export-oriented strategy, and foreign exchange reserves accumulation. Since adopting a limited floating exchange rate system pegged to the US dollar in 1999, Vietnam has promoted export growth and strengthened investor confidence through exchange rate stability. Export expansion has driven foreign direct investment and sustained reserve accumulation, enhancing financial system stability and policy credibility. However, Vietnam’s growth model still relies heavily on low-value-added manufacturing and external demand. To achieve long-term sustainable growth and elevate its global economic status, Vietnam must implement structural reforms such as gradually relaxing capital controls, increasing R&D investment, and shifting to higher value-added industries. This study offers insights into how emerging economies can leverage macroeconomic policy tools to upgrade their structures and enhance resilience to external shocks.

Keywords: Vietnam; Fixed Exchange Rate; Export-oriented Strategy; Foreign Exchange Reserves; Economic Transformation (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-874-5_79

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DOI: 10.2991/978-94-6463-874-5_79

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