Dollarization in Vietnam
Dollarization in Vietnam from 2007 to 2010
Overview of Dollarization
1 Definition
Dollarization occurs when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency in the whole or some parts of currency function.
Nowadays, dollarization has become popular all over the world.
2 Classification
← Official dollarization Official dollarization occurs when foreign currency is only legal currency in the economy. This means that foreign currency is not only used in legal contracts between private parties, but also legal in payments by the Government. Official dollarization also occurs when the countries fail in implement economic stabilization. Eg: Ecuador ← Semi - official dollarization Foreign currency and domestic are also the legal in the economy, even sometimes foreign currency can dominate in bank deposits. Foreign currency only used in some payments of wages, tax and other daily expenses. Eg: Panama used both domestic currency Balboa and USD ← Unofficial dollarization Unofficial dollarization is the case the dollar is widely used in the economy, although that country is not officially recognized. Unofficial dollarization may include the following: •The foreign currency bonds and other non-monetary assets in foreign countries. •Deposits in foreign currency abroad. •Foreign currency deposits in domestic banks. •Bonds or other valuable papers in foreign currency stored in a bag.
Current dollarization in Vietnam
1 Situation of dollarization in Vietnam from 2007 to 2010
In Vietnam, according to statistics, the rate of dollarization is always above 20% while this rate in the countries in the region is much lower, such as Indonesia, Thailand and Malaysia… only about 7-10%. The objective of the State Bank of Vietnam in 2010 to reduce this rate to 15%. The phenomenon of D. is
Overview of Dollarization
1 Definition
Dollarization occurs when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency in the whole or some parts of currency function.
Nowadays, dollarization has become popular all over the world.
2 Classification
← Official dollarization Official dollarization occurs when foreign currency is only legal currency in the economy. This means that foreign currency is not only used in legal contracts between private parties, but also legal in payments by the Government. Official dollarization also occurs when the countries fail in implement economic stabilization. Eg: Ecuador ← Semi - official dollarization Foreign currency and domestic are also the legal in the economy, even sometimes foreign currency can dominate in bank deposits. Foreign currency only used in some payments of wages, tax and other daily expenses. Eg: Panama used both domestic currency Balboa and USD ← Unofficial dollarization Unofficial dollarization is the case the dollar is widely used in the economy, although that country is not officially recognized. Unofficial dollarization may include the following: •The foreign currency bonds and other non-monetary assets in foreign countries. •Deposits in foreign currency abroad. •Foreign currency deposits in domestic banks. •Bonds or other valuable papers in foreign currency stored in a bag.
Current dollarization in Vietnam
1 Situation of dollarization in Vietnam from 2007 to 2010
In Vietnam, according to statistics, the rate of dollarization is always above 20% while this rate in the countries in the region is much lower, such as Indonesia, Thailand and Malaysia… only about 7-10%. The objective of the State Bank of Vietnam in 2010 to reduce this rate to 15%. The phenomenon of D. is