The Correlation Between World Silver Prices and Economic Fluctuations in Early Modern Vietnam through the Operations of the Bank of Indochina

This paper examines the close correlation between global silver price fluctuations and the economic stability of modern Vietnam (1875–1954), mediated by the regulatory role of the Bank of Indochina (BIC). Throughout the 1878–1930 period, the Indochinese Piastre operated under the silver standard, rendering its value highly contingent upon international metal markets. The research demonstrates that plummeting silver prices (1878–1914, 1920–1930) led to the devaluation of the Piastre, which bolstered exports but simultaneously escalated import costs and public debt. Conversely, the surge in silver prices (1914–1920) induced monetary scarcity, hindering broader economic expansion. As the sole issuing authority, the BIC implemented monetary policies designed to safeguard French capital interests, culminating in the 1930 transition to the gold standard to peg the Piastre to the French Franc. The findings underscore the inherent vulnerability and structural dependence of the colonial economy on global financial shocks.