The impact of foreign exchange rate on a balance of payments: Issues from Vietnam

The foreign exchange rate always changes and impacts many economic issues. One of these issues is the impact of the foreign exchange rate on the balance of payments. Our research focuses on the impact of the exchange rate on Vietnam's balance of payments. All data was collected from the Vietnamese State Bank in the period from 2000 to 2020. We applied the model with the unit root, Auto-Regressive Distributed Lag (ARDL), and Granger Causality Test to evaluate the impact of the foreign exchange rate on the balance of payments. The findings indicated that Vietnam's foreign exchange rate has a significant positive impact on the balance of payment. The result implied that when the foreign exchange rate is stable, it seems to create a developed and effective economic environment. All these contributions are an important base for improving Vietnam's balance of payments as well as Vietnam's economy. By deeply analyzing issues of Vietnam's foreign exchange rate and its effect, we propose some orientations and solutions for Vietnam's government and managers in issuing suitable economic policies in the future. (C) 2022 The Authors. Published by IASE.