The U.S. Treasury Department and the Vietnam central bank on Monday said they’ve reached a pact to address American concerns that the Asian country has been manipulating its currency.

Treasury Secretary Janet Yellen welcomed the mutual understanding and said the agreed to reforms would address Treasury’s concerns and also support the development on Vietnam’s financial markets.

For his part, State Bank of Vietnam Governor Nguyen Thi Hong said his bank “will continue to manage exchange-rate policy within its general monetary policy framework to safeguard the proper functioning of the monetary and foreign exchange markets, to promote macroeconomic stability and to control inflation, not to create an unfair competitive advantage in international trade.”

The agreement came after a virtual meeting Monday between the two officials.

The state bank said it would allow the Vietnamese dong
VNDUSD,
-0.04

to move more in line with fundamentals and will provide data for the U.S. Treasury to conduct analysis into the Vietnamese government’s activities in the foreign exchange markets.

Last December, the outgoing Trump administration formally accused Vietnam of manipulating its currency in ways to harm U.S. economic interests.

The Biden Administration reversed the designation in April after the two sides had begun bilateral talks.

Treasury said it would inform other U.S. government agencies about the agreement. The Trump administration had threatened to use Vietnam’s designation as a justification for broad retaliatory tariffs, said Matthew Goodman, senior vice president for economics at the Center for Strategic and International Studies.

The U.S. is running a $34.9 billion trade deficit with Vietnam through the first five months of the year, according to Commerce Department data.

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