The criteria for branding currency manipulators are rather simple. The US Treasury looks at three criteria: (1) foreign exchange intervention in terms of net purchase (either in GDP or dollar terms); (2) current account balance; and (3) bilateral trade with the US.
Commerce Secretary Says No Logic In US Putting India On Currency Watchlist Commerce Secretary Says No Logic In US Putting India On Currency Watchlist The Centre has expressed surprise atthe United States decision to put India on a monitoring list of currency manipulators.
India has been put on a currency watch list by the US with 10 other nations
The Centre has expressed surprise at the United States decision to put India on a monitoring list of currency manipulators. I don t understand any economic logic (behind the decision), Commerce Secretary Anup Wadhawan told reporters on Tuesday.
He informed that the RBI is following a policy that facilitates currency movements based on market forces.
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April 16, 2021
On April 16, the U.S. Treasury Department issued its semiannual
Report to Congress on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States, the first release during the Biden administration and under Secretary Yellen. In this latest “FX report,” Treasury declined to designate any country for currency “manipulation,” reversing its December 2020 designation of Switzerland and Vietnam. However, it concluded that Switzerland and Vietnam, as well as Taiwan, met three criteria to trigger “enhanced engagement” to “address underlying causes” of currency undervaluation and external imbalances.
Q1:
What is the FX report and how does it determine “manipulation”?