Why did the US remove India from its currency watch list and what does this mean?

0
12
Why did the US remove India from its currency watch list and what does this mean?
google news

<!–

–>

What is the US Currency Watch List and its criteria?

India is among the few countries that the US Treasury Department has removed from its currency watch list.

The department announced the decision in its semi-annual report to the US Congress. The other countries to be removed from the list are Mexico, Italy, Thailand and Vietnam.

What is the Currency Watch List and how is a country added to it?

The United States Treasury Department established the Currency Watch List to pay close attention to the monetary practices and microeconomic policies of major trading partners of the United States.

According to the report, economies that meet two of the three criteria of the Trade Facilitation and Trade Enforcement Act 2015 are added to the watch list.

Once a country is placed on the list, it remains there for at least two consecutive reports to help the Treasury ensure that any improvement in performance is sustainable and not due to temporary factors.

“Italy, India, Mexico, Thailand and Vietnam were removed from the watch list in this report, having met only one out of three criteria for two consecutive reports,” the report said.

In the November report, the Treasury assessed the performance of the United States’ top 20 trading partners that met two of the three criteria listed below.

1. Large bilateral trade surplus with the United States:

A large bilateral trade surplus with the United States means a trade surplus of at least $15 billion in goods and services.

2. Current account material surplus:

The Department defines a material current account surplus as a surplus of at least 3% of GDP” or a surplus for which the Treasury estimates there is a material “gap” in the current account using the rate of exchange assessment framework. Global Exchange (GERAF) of the Treasury”.

3. Persistent and unilateral intervention:

In this criterion, the Treasury repeatedly assesses the net purchases of a foreign currency at least eight months out of 12. These net purchases “totalize at least 2% of the GDP of an economy over 12 months”.

The Treasury Department, in its report, also assessed whether trading partners manipulated the exchange rate between the US dollar and their currency to gain an unfair competitive advantage in international trade and prevent effective balance of payments adjustments.

The countries featured in the latest Monitoring report are Japan, China, Korea, Germany, Singapore, Taiwan and Malaysia.

Featured Video of the Day

Rupee hits new high of 83.30 per dollar

ndtv

google news
Previous article720 citations issued, 19 cars seized following San Jose sideshow, police say
Next articleMajor events in history that took place on November 14