The US Department of Treasury removed India from its Currency Monitoring List of significant trading partners that warrant rigorous scrutiny of their currency practices and macroeconomic policies, along with Italy, Mexico, Thailand, and Vietnam.
In the previous two years, India has been featured on the list.
In-Depth details about India gets removed from the US Department of Treasury’s Currency Monitoring List:
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.
According to the Department of Treasury’s biannual report to Congress, the seven economies that are now under observation are China, Japan, Korea, Germany, Malaysia, Singapore, and Taiwan.
It stated that the nations who were taken off the list have only complied with one of the three requirements for two reports in a row.
According to the research, China stands out among large economies due to its failure to disclose foreign exchange intervention and general lack of openness about important aspects of its exchange rate system. This makes China a candidate for Treasury’s strict monitoring.
The fact that Switzerland has again exceeded the cutoffs for all three criteria, a requirement for being classified as a “Currency Manipulator” is noteworthy.
However, the Report did not use the phrase, and the Treasury Department insisted that there is insufficient justification to apply the label to Switzerland.
According to a media notice, the Treasury will keep up its improved bilateral interaction with Switzerland, which began in early 2021, to talk about the country’s policy choices for addressing the root causes of its external imbalances.
Approximately 80% of the US’s international commerce in goods and services during the four quarters to June 2022 were examined and evaluated by Treasury for this report.
Before Russia’s illegal war against Ukraine, the world economy was already dealing with supply and demand imbalances brought on by COVID-19. As a result, food, fertilizer, and energy prices have gone up, further boosting global inflation and escalating food insecurity, according to Treasury Secretary Yellen.
Major economies are likely to pursue diverse strategies in response to various challenges, which can be seen in currency movements. According to her, the Treasury recognizes that a variety of responses by developing and emerging nations to global economic headwinds may be necessary for some circumstances.