India, China, four other countries in US' currency watchlist
The US has added India to a list of countries with potentially questionable foreign exchange policies, along with China and four other countries. However, in its semi-annual report, the Treasury Department decided not to label China as a currency manipulator, despite President Trump's vows during his election campaign. Notably, the report declared that the Trump administration was "deeply concerned" with global trade imbalances.
The US will continue to "monitor" unfair currency practices
"We will continue to monitor and combat unfair currency practices, while encouraging policies and reforms to address large trade imbalances," said US Treasury Secretary Steve Munchkin in a statement. The Treasury Department's report helps Congress identify countries trying to artificially manage their currency valuation.
Report concludes no major US trading partner manipulated currency
The US Treasury Department report put China, Japan, Korea, Germany, and Switzerland into its watchlist. The report found that China's currency had moved in a direction which would reduce its surplus with the US over the course of 2018. The report also concluded that no major US trading partner had met the criteria for "currency manipulation" in the second half of 2017.
What the US Treasury had to say about Germany, Korea
The US Treasury Department also found a "notable and concerning pick-up" in Korean intervention in currency during November and January. Germany had the "world's largest current account surplus" and was in the list for "little to no progress" in reducing this surplus.
Why India was included in the currency manipulation watchlist
Among the six countries in the watchlist, India's addition is the latest. India, with a $23 billion trade surplus over the US, increased its foreign exchange purchases in 2017 to $56 billion. Yet, India's currency had appreciated by 6% against the US dollar during the same period on a real effective basis, prompting the US Treasury Department to put India into the list.Share this timeline