The US Treasury on Wednesday accused the communist state of intervening in currency markets to weaken the dong, which the IMF said was undervalued by some 8.4% in 2018.

The State Bank of Vietnam said its currency management policy aimed to “control inflation and stabilise the macro-economy, not create an unfair advantage in international trade”.

“The State Bank’s recent intervention in buying foreign currencies is aimed at ensuring the smooth operation of the foreign currency market,” the central bank said in a statement.

Foreign ministry spokeswoman Le Thi Thu Hang said Vietnam attached “special importance” to trade ties with the US and was consulting Washington to address “outstanding issues”.

US officials reviewed 20 major trading partners with bilateral goods trade with the US of at least US$40 billion annually.

They accused Vietnam — as well as Switzerland — of interfering in foreign exchange markets to artificially weaken their currencies.

The Treasury report called on Vietnam to “reduce its currency intervention and allow for movement in the exchange rate”.

The findings in the report are largely symbolic and do not entail sanctions, instead of triggering more consultations to try to address the dispute.