U.S. Tags Switzerland Currency Manipulator, Keeps China on Watch
Bloomberg
12/17/2020
Saleha Mohsin and Liz Capo McCormick
(Bloomberg) -- The U.S. Treasury Department designated Switzerland and Vietnam as currency manipulators for the first time, while keeping China on a watch list, in the Trump administration’s final foreign-exchange policy report.
Having removed the manipulator label from China in January, the Treasury urged the world’s second-largest economy to “improve transparency” in its currency management, especially of its central bank’s relationship with state-owned banks -- which market participants say can act in the currency market with official guidance.
The manipulator designation has no specific or immediate consequence, beyond short-term market impacts. But the law requires the administration to engage with the countries to address the perceived exchange-rate imbalance. Penalties, including exclusion from U.S. government contracts, could be applied after a year unless the label were removed.