US Treasury removes India from its Currency Monitoring List

Tags: Economy/Finance

The US Department of Treasury (American Finance Ministry) on 11 November 2022 has removed India along with Italy, Mexico, Thailand and Vietnam from its Currency Monitoring List.

China, Japan, Korea, Germany, Malaysia, Singapore, and Taiwan are the seven economies that are a part of the current monitoring list, the Department of Treasury said in its biannual report to the American Congress (American Parliament).

India was for the first time put in the currency monitoring list in 2018 and was later on removed later on. But it was again put in the list in April 2021. 

The countries that have been removed from the list have met only one out of three criteria for two consecutive reports, it said.

What is Currency Monitoring List? 

Under the 2015 act of the United States the department of Treasury has to submit a semi-annual report to the United States Congress(American Parliament) in which it mentions major trading partners of the United States which it believes enjoy unfair trade advantage due to currency manipulation.

Currency manipulation means that the country deliberately keeps the value of its currency low as compared to its competitors so as to keep the price of its exported goods low and hence boost its exports. 

An economy meeting two of the three criteria in the 2015 Act is placed on the Monitoring List. These criteria are as follows:

• The country shall have a large trade surplus with the United States.
• The country persistently intervenes in the foreign exchange market and buys foreign exchange in at least six out of 12 months and the net purchase of foreign currency shall be higher than 2% of country’s gross domestic product (GDP).
• The country shall have a current account surplus of at least 3% of GDP.