On 29th 2019, Wednesday US removed India from the currency monitoring list. The US also removed Switzerland from the list.
In the current semi-annual foreign exchange report presented to Congress, administration of US eliminated India and Switzerland from its currency monitoring list. However, the list still includes China, South Korea, Japan, Malaysia, Singapore, Vietnam, Ireland, and Italy.
“India has been removed from the monitoring list in this report, having met only one out of three criteria – a significant bilateral surplus with the US – for two consecutive reports,” the Treasury Department said presenting the report to the Congress on macroeconomics and foreign exchange policies of major trading partners of the US.
“Neither Switzerland nor India met the criteria for having engaged in persistent, one-sided intervention in either the October 2018 report or this report. Both Switzerland and India have been removed from the monitoring list,” the Treasury said in its report of 40 pages.
“After purchasing foreign exchange on the net in 2017, the central bank steadily sold reserves for most of 2018, with net sales of foreign exchange reaching 1.7 percent of GDP over the year”, report says. “India maintains ample reserves according to the IMF metrics for reserve adequacy” according to the report.
This is a positive development for India as it is out of the currency watch list radar, which could have ultimately led to a tag of being a currency manipulator. Country indulges in manipulating the currency exchange rates to gain an unfair competitive advantage in international trade end up with this tag.
The US Department of Treasury releases the semi-annual report where it has to track developments in international economies and inspect foreign exchange rates. If any trading partner of the US meets a three-assessment review, bilateral talks are held to resolve the issues.