U.S. puts India on ‘currency manipulators’ monitoring list
Context: The U.S. Treasury labeled Switzerland and Vietnam as currency manipulators and added three new names, including India, to a watch list of countries it suspects of taking measures to devalue their currencies against the dollar.
U.S. Treasury claimed that in the year through June 2020 Switzerland and Vietnam had intervened heavily in currency markets to prevent effective balance of payments adjustments.
Treasury’s criteria
- To be labeled a manipulator by the U.S. Treasury, countries must
- at least have a $20 billion-plus bilateral trade surplus with the U.S.,
- foreign currency intervention exceeding 2% of gross domestic product and
- a global current account surplus exceeding 2% of GDP.
India’s intervention
- “Monitoring list” of countries that meet some of the criteria has hit 10, with the additions of Taiwan, Thailand and India.
- Others on the list include China, Japan, Korea, Germany, Italy, Singapore and Malaysia.
- The report also said that India and Singapore had also intervened in the foreign exchange market in a “sustained, asymmetric manner” but did not meet other requirements to warrant designation as manipulators.
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