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Energy Security and Exchange Rate Dynamics in Vietnam

In: ENERGY SECURITY, TRANSITION, AND ECONOMIC GROWTH

Author

Listed:
  • CHUC ANH TU
  • EHSAN RASOULINEZHAD
  • CHI THANH NGO
  • LE HOANG BA HUYEN
  • HANH HOANG THANH

Abstract

This chapter empirically revisits energy insecurity in Vietnam, focusing on the role of the official exchange rate. Using data from 1985 to 2022 and applying the GMM estimator based on the 4A theory of energy security, we found that economic growth positively impacts the official exchange rate. CO2 emissions negatively affect the exchange rate, indicating an inverse relationship, while inflation negatively influences the exchange rate by increasing the cost of domestic products, which boosts import flows and depreciates the national currency. Additionally, energy intensity is negatively related to the official exchange rate. Our analysis also reveals that a 1% increase in gas imports is linked to a decline in the official exchange rate. This chapter recommends that Vietnam should diversify its gas imports, enhance local energy production, and improve energy efficiency to strengthen its currency against the USD and improve energy security.

Suggested Citation

  • Chuc Anh Tu & Ehsan Rasoulinezhad & Chi Thanh Ngo & Le Hoang Ba Huyen & Hanh Hoang Thanh, 2025. "Energy Security and Exchange Rate Dynamics in Vietnam," World Scientific Book Chapters, in: Farhad Taghizadeh-Hesary & Youngho Chang & Naoyuki Yoshino (ed.), ENERGY SECURITY, TRANSITION, AND ECONOMIC GROWTH, chapter 10, pages 201-216, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789819812608_0010
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    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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