Economics
ECO 365 Humacao CC Benefits and Risks of Investing in Vietnam Paper

ECO 365

Humacao Community College

ECO

Question Description

I’m trying to learn for my Economics class and I’m stuck. Can you help?

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 advantage 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 ask for a brief document on the these risk 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.

The following link may be of help.

https://x-rates.com/ (Links to an external site.)

https://tradingeconomics.com/vietnam/interest-rate (Links to an external site.)

https://www.state.gov/u-s-relations-with-vietnam/ (Links to an external site.)

https://vietnamnet.vn/en/politics/vietnam-us-relations-to-build-on-new-milestone-623969.html (Links to an external site.)

https://www.expatistan.com/cost-of-living/country/vietnam

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Final Answer

Attached.

Running head: ECONOMICS OF GLOBALIZATION

Economics of Globalization
Benefits and Risks of Investing in Vietnam
Name
Institution
Date

1

ECONOMICS OF GLOBALIZATION

2

Benefits and risks of investing in Vietnam
Exchange rate comparison
The exchange rate policy in Vietnam was stabilized after undergoing a lot of reforms
which resulted in the reduction of inflation. None the less the country’s currency Vietnam Dong
(VND) was overvalued over a time. In their study on the effects of exchange rate reforms, Phuc
et al. (2014) noted that reforms in exchange rate policy increased Vietnam’s attractiveness to
Direct Foreign Investment hence economic growth. Vietnam has been successful in improving
its exchange rate efficiency, which has contributed to steady economic growth. The sustained
economic growth provides an ideal environment for foreign investment; therefore, Vietnam is an
attractive investment destination for the billionaire.
However, Vietnam’s present method of determining the exchange rate is pegged on the
average of the interbank exchange rates recorded the previous day. The limitation of this
approach is that it does not link the economic basics because it is undertaken as a procedural
process which makes it hard to determine if the current value of the Vietnamese Dong (VND) is
correct (Phuc et al., 2014). The current exchange rate regime in Vietnam does not clarify its
ec...

Kishnewt2017 (32424)
Duke University

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