US Treasury removes India from currency watch list

NAIROBI, Kenya November 14 – The US Department of the Treasury on Friday removed India along with Italy, Mexico, Thailand and Vietnam from its currency watch list of major trading partners that deserve close attention to their practices monetary policies and their macroeconomic policies.

India had been on the list for two years.

The move came a day when Treasury Secretary Janet Yellen visited New Delhi and held talks with Finance Minister Nirmala Sitharaman.

China, Japan, Korea, Germany, Malaysia, Singapore and Taiwan are the seven economies that are on the current watch list, the Treasury Department said in its semiannual report to Congress.

Countries that were removed from the list met only one out of three criteria for two consecutive reports, he said.

“China’s inability to publish foreign exchange interventions and the broader lack of transparency around key features of its exchange rate mechanism make it an exception among major economies and warrant close Treasury monitoring,” the report said. report.

Notably, Switzerland again exceeded the thresholds for all three criteria, which is a parameter to be labeled as a “currency manipulator”.

But the term was not used by the report, and the Treasury Department argued there was insufficient evidence to use the label for Switzerland.

The Treasury will continue its enhanced bilateral engagement with Switzerland, which began in early 2021, to discuss Swiss authorities’ policy options to address the underlying causes of its external imbalances, according to a press note.

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In this report, the Treasury reviewed and assessed the policies of the United States’ major trading partners, which account for approximately 80% of U.S. foreign trade in goods and services, in the four quarters through June 2022.

“The global economy was already grappling with supply and demand imbalances caused by Covid-19 before Russia’s illegal war on Ukraine, which drove up the prices of food, fertilizer and oil. energy, which has further increased global inflation and food insecurity,” Treasury Secretary Yellen said. .

Larger economies facing different stresses may therefore pursue different policies, which may be reflected in currency movements. The Treasury is aware that a range of approaches by developing and emerging economies to headwinds in the global economy may be warranted in certain circumstances, she said.

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