Washington: The US Treasury Department has removed India from it’s currency monitoring list of major trading partners on Tuesday. Switzerland was also removed by the US other than India from it’s currency monitoring list which among others include China, Japan, South Korea, Germany,Italy, Ireland, Singapore, Malaysia and Vietnam according to the treasury department’s latest 40 pages report.
US once again refuses to classify china as currency manipulator and continued to keep china on it’s watch list, while strongly recommending the Asian nation to take necessary steps to avoid a continuously weak currency. The report says India has been removed from the monitoring list because they met only one out of three standards.
Necessary for inclusion on the monitoring list, a significant bilateral surplus with the US — for two consecutive reports , the Treasury Department said in its latest semi annual report on macroeconomic and foreign exchange policies of major trading partners of the US sent to the Congress. In it’s semi annual report to US Congress on International Economic and Exchange Rate Policies, the treasury department removed both the nations; India and Switzerland from their previous currency watch list of countries with their possibly questionable foreign exchange policies.
This means India is not having a questionable foreign exchange policy as far as US is concerned. Treasury continues to tell China to take the necessary steps to avoid a continuously weak currency. Both India and Switzerland were downwards in 2018 in the scale and at foreign purchases too. The report said India maintains ample reserves according to the IMF metrics for reserve adequacy.
Earlier India was placed by the US in its currency monitoring list of countries with questionable foreign exchange policies in May 2018 with countries like China, Germany, Japan, South Korea and Switzerland. The reported of October 2018 mentioned that India shows improvement and gradually be removed from currency manipulation list.
India’s condition have changed, when the central bank’s net sales of foreign exchange over the first six months of 2018 led net purchases over the four quarters through June 2018 to fall to $4 billion, or 0.2 per cent of the GDP, the treasury mentioned in their October 2018 report. However, the department, in its report, has declined to classify China or any other major nations as a currency manipulator.
Mr Mnuchin stated that China’s Renminbi had fallen against the dollar by eight percent over the last year. He also noted that China’s trade surplus with the US has also widened. He also said treasury found that nine major trading partners continue to warrant placement on treasury’s Monitoring List of major trading partners that merit close attention to their currency practices. China’s goods trade surplus with US stands at $419 billion over the four quarters through December 2018 the 40 page report said. The report also concluded that No trading partner was found to have met the 1988 legislative standards during the current reporting period.