• Thu. Sep 28th, 2023

India is taken off the US’s currency watch list; find out why HERE

ByJosh Taylor

Nov 12, 2022

The action was taken on the same day that Janet Yellen, the Secretary of the Treasury, visited New Delhi and spoke with Nirmala Sitharaman, the finance minister.
New Delhi: On Friday, November 11, 2022, the US Department of Treasury withdrew India and four other nations from the Currency Monitoring List. The key trading partners on the watch list are those who need rigorous scrutiny of their macroeconomic and monetary policies. Italy, Mexico, Thailand, and Vietnam were the other nations that were taken off the list in addition to India. When US Treasury Secretary Janet Yellen visited New Delhi and met with India’s Finance Minister Nirmala Sitharaman, the US Department of Treasury took this action.
China, Japan, Korea, Germany, Malaysia, Singapore, and Taiwan are currently the seven economies that have stayed on the list and are a part of the current monitoring list after five governments were removed from the list. India was notable because it had been there for roughly two years.
Regarding the grounds for removal, the official department’s report indicates that the nations that have been struck off the list have consistently only met one of the three requirements.
According to the research, China stands out among major economies due to its failure to disclose foreign exchange intervention and general lack of transparency about important aspects of its exchange rate mechanism. As a result, the Treasury should pay careful attention to China.
It is significant that Switzerland has once more surpassed the thresholds for all three criteria, which is necessary to qualify as a “Currency Manipulator.” The Treasury Department claimed that there is not enough evidence to classify Switzerland as such, notwithstanding the Report’s omission of the word.
The Treasury will continue its enhanced bilateral communication with Switzerland, which began in early 2021, to discuss the nation’s policy options for addressing the underlying causes of its external imbalances, according to a media report.
For this research, Treasury looked at and evaluated around 80% of US overseas trade in goods and services over the four quarters leading up to June 2022.
Treasury Secretary Yellen asserts that, prior to Russia’s illegal invasion of Ukraine, “the global economy was already dealing with supply and demand imbalances caused by COVID-19, which have increased the price of food, fertiliser, and energy – further elevating global inflation and increasing food insecurity.”
Currency regular occurrence that major economies are likely to adopt a variety of methods in response to a range of issues. The Treasury is aware that various responses to the global economic headwinds by developing and emerging nations may be justified in particular situations, she said.

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