{"id":34748,"date":"2022-11-12T08:54:28","date_gmt":"2022-11-12T03:24:28","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=34748"},"modified":"2025-04-20T16:53:14","modified_gmt":"2025-04-20T11:23:14","slug":"in-news-the-us-department-of-treasury-has-removed-india-from-its-currency-monitoring-list-of-major-t","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/in-news-the-us-department-of-treasury-has-removed-india-from-its-currency-monitoring-list-of-major-t\/","title":{"rendered":"Us Treasury Removes India From Its Currency Monitoring List"},"content":{"rendered":"<h3><strong>What\u2019s in today\u2019s article:<\/strong><\/h3>\n<ul>\n<li><strong>Currency Monitoring List \u2013 About, criteria for inclusion, impact, India\u2019s inclusion etc.<\/strong><\/li>\n<li><strong>News Summary<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h3><strong>Why in news?<\/strong><\/h3>\n<ul>\n<li>The US Department of Treasury has removed India from its Currency Monitoring List of major trading partners.<\/li>\n<li>Along with India, the United States also removed Italy, Mexico, Thailand and Vietnam from its Currency Monitoring List.<\/li>\n<li>India had been on the list for the last two years.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Currency Monitoring List<\/strong><\/h2>\n<ul>\n<li>Currency Monitoring List of\u00a0<strong>major trading partners<\/strong>\u00a0of the USA is the list of countries that merit close attention to their currency practices and macroeconomic policies.<\/li>\n<li>Basically, it is a monitoring list of countries with\u00a0potentially \u201cquestionable foreign exchange policies\u201d and \u201ccurrency manipulation\u201d.\n<ul>\n<li>Currency manipulator label is given by the US government to countries it feels are engaging in unfair currency practices by deliberately devaluing their currency against the dollar.<\/li>\n<li>The practice would mean that the country in question is\u00a0artificially lowering the value of its currency to gain an unfair advantage over others.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Criteria for inclusion in the list:<\/strong><\/h2>\n<ul>\n<li>Country\u2019s inclusion is based on the three key criteria:\n<ul>\n<li>a significant bilateral trade surplus (equivalent to $15 billion) with the United States;<\/li>\n<li>a material current account surplus (equivalent to 3 per cent of gross-domestic product); and<\/li>\n<li>engaged in persistent one-sided intervention in the foreign exchange market.<\/li>\n<\/ul>\n<\/li>\n<li>Countries remain on the list for\u00a0two report cycles\u00a0to ensure that if there are any improvements in the performance of the country it should not be due to temporary reasons.<\/li>\n<li>An economy meeting two of the three criteria is placed on the\u00a0<strong>Watch List<\/strong>. Countries that meet all three of the criteria are labelled as\u00a0<strong>currency manipulators<\/strong>\u00a0by the Treasury.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>What happens if a country gets included in the list?<\/strong><\/h2>\n<ul>\n<li>The designation of a country as a currency manipulator does not immediately attract any penalties.<\/li>\n<li>However, it tends to dent the confidence about a country in the global financial markets.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>India\u2019s inclusion in the list<\/strong><\/h2>\n<ul>\n<li>India was last included in the currency watchlist in October 2018, but was removed from the list in May 2019.<\/li>\n<li>Again, in December 2020, India was included in the list. Since then, it had been on the list, only to be removed recently.<\/li>\n<li>Indian policymakers criticized India\u2019s inclusion in the list by saying that the move is an\u00a0intrusion of the policy space of the RBI.\n<ul>\n<li>RBI is mandated to provide stability in the currency, as a result of which central banks buy and sell foreign currency.<\/li>\n<\/ul>\n<\/li>\n<li>As per India, RBI is not accumulating reserves and its activity in the foreign exchange market is perfectly balanced.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Why India was Included in this list?<\/strong><\/h2>\n<ul>\n<li>As per the US Department of Treasury, India had fulfilled the criteria for inclusion in the list in December 2020 and it continued to do during the review of April 2021.<\/li>\n<li>For example, the reasons cited by the US for India\u2019s inclusion in April 2021 were:\n<ul>\n<li>India\u2019s trade surplus with the United States had gone up by nearly $5 billion in the financial year 2020\/21.<\/li>\n<li>India\u2019s bilateral trade surplus in goods with the United States totalled $24 billion in 2020, along with a services trade surplus of $8 billion.<\/li>\n<li>The report also highlighted that the RBI\u2019s dollar purchase stood at 5% of the GDP exceeded the\u00a0<strong>2% threshold.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>News Summary<\/strong><\/h2>\n<ul>\n<li>India, along with four other countries has been removed from the Currency Monitoring List by the US Department of Treasury.<\/li>\n<li>The countries that have been removed from the list have\u00a0met only one out of three criteria for two consecutive reports.<\/li>\n<li>Currently, after the removal of five states, China, Japan, Korea, Germany, Malaysia, Singapore and Taiwan are the remaining seven economies that have remained on the list and are a part of the current monitoring list.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>US Department of Treasury removed India along with Italy,Mexico,Vietnam from its Currency Monitoring List<\/p>\n","protected":false},"author":5,"featured_media":34749,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-34748","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/34748","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=34748"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/34748\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/34749"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=34748"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=34748"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=34748"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}