US Treasury removes India from its Currency Monitoring List

TNI Bureau:In a positive development for India, The US Treasury Department removed India, along with Italy, Mexico, Thailand, and Vietnam, from its Currency Monitoring List of major trading partners that warrant close scrutiny of their currency practices and macroeconomic policies on Friday. For the past two years, India has been on the list.

The announcement came on the same day that Treasury Secretary Janet Yellen visited New Delhi and spoke with Finance Minister Nirmala Sitharaman. The current surveillance list includes China, Japan, Korea, Germany, Malaysia, Singapore, and Taiwan, according to the Department of Treasury’s biannual report to Congress.

The countries that were removed off the list failed to meet one of the three requirements for two consecutive reports, according to the study.

“China’s reluctance to announce foreign exchange intervention and broader lack of openness around key components of its exchange rate mechanism distinguishes it among major economies and necessitates Treasury’s attentive monitoring,” the report stated.

Switzerland, in particular, has once again exceeded the benchmarks for all three criteria, which is a requirement for being labelled as a “Currency Manipulator.” However, the phrase was not used in the Report, and the Treasury Department argued that there is insufficient evidence to use it for Switzerland.

US Treasury removes India from its Currency Monitoring list

— Press Trust of India (@PTI_News) November 11, 2022

Treasury analyzed and assessed the policies of major US trading partners, accounting for nearly 80% of US foreign trade in goods and services during the four quarters ending June 2022, in this study.

“Prior to Russia’s illegal war on Ukraine, the world economy was already suffering with supply and demand imbalances produced by COVID-19, which has boosted food, fertilizer, and energy prices, further rose global inflation and created food poverty,” stated Treasury Secretary Yellen.

Major economies under distinct stressors may pursue different policies as a result, which can be seen in currency movements. According to her, the Treasury recognizes that a variety of responses by developing and emerging nations to global economic headwinds may be necessary in some circumstances.