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III, The application of impossible trinity in VietNam in 2007 1, The fact Viet Nam joined the WTO , 11 January

2007, taking the organizations membership to 150. Macroeconomy in VietNam was considerably affected by economy of the world. It created more opportunity for VietNam to attract more investment form developing countries.Total social investment capital in 2007 is estimated at about 464.5 thousand billion VND, equaling 40.6% of GDP, up 16.4% compared to 2006, of which the State's capital increased by 17.5% which official development assistance (ODA) increased 12%, capital of foreign direct investment (FDI) rose 17.1%, business investment increased by 19.5% population. The stock market developed rapidly, becoming a channel to mobilize long-term investment in economic importance.

Three main capitals in VietNam from 2001 to 2009 (VietNam index) In 2007, hyper inflation happened". The cause of inflation may be due to demand pull (by aggregate demand in the economy increases), cost-push (by the factor input costs rise), lack of supply (when the economy reaches or exceeds level of potential output), excessive money supply growth (increasing the total payment - M2) and psychological factors (inflation expectations). Analysising of inflation in our country in recent years, there were enough reasons, just as cost-push inflation - due to input costs (raw materials, transportation, storage, energy, wages ... ) increasing, pushing up prices at the output

high was both demand pull inflation - as demand of consumers, businesses and government increased, which were accompanied by increased prices of goods and services; medium was expected inflation to arise from psychological factors and speculation.

(ADB bank) 2, The application of impossible trinity : a, Purchasing foreign currency : Unlike previous years, in 2007, it was aimed to maintain decreasing the currency rate to a few percentage points, creating favorable conditions for exports. However it became more difficult when the amount of foreign currency flew into Vietnam increasing sharply due to the outbreak of the stock market and other capital flows. In contrast VietNam currency had trend to appreciate against and it was found difficult to increase exports. In addition, import in the first quarter increasing (although they are mainly machinery and raw materials for production) had made foreign trade balance deficit. Facing pressure mentioned above and the desire to increase the number of foreign reserves in case unforeseen happens, the State Bank of Vietnam had bought a large amount of foreign currency which was estimated by World Bank, only in the first quarter, foreign exchange reserve in Vietnam increased by about 3 billion dollars, and was equivalent to nearly 50,000 billion VND to be put into circulation. Perhaps because of purchasing the foreign currency in the early days in June of 2007,

the exchange rate between Vietnam dong and the dollar had risen back up above 16,100, instead of just around 16,000 numbers as before. b, Increasing the required reserve rate The increase in foreign currency for the national reserve was necessary, but the injection of large amounts of cash into the economy would increase inflation pressures, when the consumer price index in the last five months had increased 7.3% over the same period last year (World Bank 2007). This made the target to control price increasing in 2007 at 6.5% figure more difficult. One of the most important tasks of the State Bank was facing challenges to reduce pressure on the CPI increase during the rest of 2007 and the only way was to withdraw money from the economy. Increasing required reserve was the solution . With the increase in required reserve rate in Vietnam dong deposits from 5% to 10%, there were about 40,000 to 50,000 billion VietNam dong which is equivalent to money to buy 3 billion dollar above, turn back the State Bank. Thus, the two interventions are given, at least three goals were achieved including: ensuring stable exchange rate target, increasing the amount of foreign exchange reserves do not national but inflationary pressure Money was flowing into the cellar in the tank so there is nothing happened.