Question

You are part of the foreign exchange desk at Barclays. You are approached by a multibillionaire that wants to move from the USA to Vietnam to set up his businesses and plans to retire in Hanoi. the billionaire has asked you to provide him with all the risks and advantages of moving his money to Vietnam. Most importantly the billionaire is concerned about the value of bank accounts and products moving to and from Vietnam. The billionaire has asked for a brief document on these risks and advantages. Be to discuss the following: exchange rates of the two countries, the interest rates of the two countries, purchasing power, and other topics as it concerns the financial situation.

Answer 1

The relationship between the Vietnamese dong and the US dollar remains an important one. Although the dong is not freely convertible, it remains loosely pegged to the dollar in an arrangement known as a ‘crawling peg’.

currency rankings show that the most popular Viet Nam Dong exchange rate is the VND to USD rate. The currency code for Dongs is VND, and the currency symbol is ₫.

1 United States Dollar equals

23,632.50Vietnamese dong on march 2020.

Interest Rate in Vietnam is expected to be 5.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Interest Rate in the United States averaged 5.62 percent from 1971 until 2020, reaching an all time high of 20 percent in March of 1980 and a record low of 0.25 percent in December of 2008.

In 2018, purchasing power parity for Viet Namwas 7,788.9 LCU per international dollars.Purchasing power parity of Viet Namincreased from 2,667.5 LCU per international dollars in 1999 to 7,788.9 LCU per international dollars in 2018 growing at an average annual rate of 5.97%.

A nation's GDP at purchasing power parity (PPP) exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States in the year noted. This is the measure most economists prefer when looking at per-capita welfare and when comparing living conditions or use of resources across countries. The measure is difficult to compute, as a US dollar value has to be assigned to all goods and services in the country regardless of whether these goods and services have a direct equivalent in the United States (for example, the value of an ox-cart or non-US military equipment); as a result, PPP estimates for some countries are based on a small and sometimes different set of goods and services.

Real GDP growth is projected to remain robust at around 6.5% in 2020 and 2021. Annual headline inflation has been stable for the seven consecutive years – at single digits, trending towards 4% and below in recent years.

Vietnam’s HCI is highest among middle-income countries, but there are some disparities within the country, especially for ethnic minorities. There would also be a need to upgrade the skill of the workforce to create productive jobs at a large scale in the future.

Final energy consumption tripled over the past decade, growing faster than output. Energy intensity of GDP has been steadily increasing. Demand for water continues to increase, while water productivity is low, about 12 percent of global benchmarks.

The economy of the United States is highly developed and mixed. It is the world's largest economy by nominal GDP and net wealth and the second-largest by purchasing power parity (PPP). It also has the world's eighth-highest per capita GDP (nominal) and the tenth-highest per capita GDP (PPP) in 2018. The U.S. has the most technologically powerful economy in the world and its firms are at or near the forefront in technological advances; especially in computers, pharmaceuticals, and medical, aerospace, and military equipment.The U.S. dollar is the currency most used in international transactions and is the world's foremost reserve currency, backed by its economy, its military, the petrodollar system and its linked eurodollar and large U.S. treasuries market.