The United States’ Department of Treasury has removed India along with Italy, Mexico, Thailand and Vietnam from its Currency Monitoring List.
Key points
- In its biannual report to the Congress, the US department of treasury said the countries which have been removed from the list have met one out of three criteria for two consecutive reports.
- India was removed by the US from the currency manipulator watchlist in 2019 but it was again put in the list in December 2020.
- The watch list typically includes the countries that, the US suspects, are intervening in their foreign exchange markets to gain an unfair trade advantage.
- India has often criticised the US’ move, stating it’s devoid of logic and that the country has never been a currency manipulator. India needs to limit foreign exchange intervention to “circumstances of disorderly market conditions, and refrain from excessive reserve accumulation,”
- The US usually puts a trading partner on its watchlist if that country has intervened in the currency market by higher levels than 2% of its GDP over a year, and had a current account surplus above a stipulated level. Its net purchases of foreign currency, too, also need to exceed 2% of GDP over one year.
- China, Japan, Korea, Germany, Malaysia, Singapore, and Taiwan are the seven economies that are a part of the current Currency Monitoring List.
