US Treasury report: India placed on currency watch list

The United States recently released its report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States. The report reviewed currency practices of the biggest trading partners of the US.

About the report

The three main criteria used by the report to review the trading partners of US are as follows:

  • Material Current Account Surplus
  • Bilateral Trade surplus
  • Persistent one-sided intervention in forex markets

Key Findings of the report

  • The report has placed India on the “Monitoring list”. Totally eleven trading partners of the US were placed in the list. The other ten countries were Japan, China, Germany, Korea, Italy, Ireland, Singapore, Malaysia, Mexico and Thailand. India met two of the three criteria. They were the persistent one sided intervention and trade surplus.
  • All the three criteria were met by Vietnam, Switzerland and Taiwan.
  • This time, the US has removed China from its list of manipulators.
  • However, Taiwan has been placed in the watch list. In 2020, Taiwan gained 5.6% against the US dollar. The report says that Taiwan accumulated 530 billion USD in foreign exchange reserves. This was 79% of GDP of the country.
  • India’s trade surplus with the US was 24 billion USD in 2020.
  • The trade surplus of China with the US was the highest. It stood at 311 billion USD.
  • The US Government had removed Vietnam and Switzerland from the list of currency manipulator. According to the US, currency manipulation is deliberately influencing the exchange rate between one’s currency and US dollar. This is being done to gain unfair competitive advantage in international trade.


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