Currency Monitoring List & Its Impact (Download PDF)


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The United States in May 2019 removed India and Switzerland from the currency monitoring lists. The Countries such as China, Japan and Germany are still in the list of US Currency Monitoring. The Currency Monitoring actually is a way of observing a strict vigil upon the currency manipulation when there is a doubt over the foreign exchange policies of certain countries in case there is an undervaluation of currencies to gain export advantages.

India had a bilateral trade surplus with US which crossed country’s maximum limit of $20 million. As a result of this India was placed by US in its currency monitoring list in May 2018.

This is image of monitoring Forex

This is Image of Monitoring Forex

This is image of monitoring Forex

Background & Objectives

  • Apart from India China, Japan, South Korea and Germany were the other countries with questionable foreign exchange policies.

  • The step was taken by the US because of the escalating trade tensions

  • India was excluded because it has taken steps and developments addressing some its major concerns over its currency practices and macroeconomic policies.

Criteria for Inclusion

  • If the partner country is engaged in bilateral trade surplus with the United States.

  • In case of the partner country if there is a material current account surplus.

  • In case the partner country is engaged in persistent one sided intervention in foreign exchange (Forex) market.

India-US Recent Trade Relations

  • The US is India’s largest export market, accounting for something like 20 per cent of the total.

  • India is also looking forwards to reduce its trade surplus of over $20 billion with the United States.

  • India’s average applied tariff rate of 13.8 per cent, and that remains the highest of any major world economy. The very highest. It has, for example, a 60 per cent tariff on automobiles; it has a 50 per cent on motorcycles; and 150 percent on alcoholic beverages.

  • Its bound tariff rates, namely the highest rate they can charge, on agricultural products average and incredible 113.5 percent, and some are as high as 300 per cent.

  • US has been putting pressure on India by increasing tariffs on products like steel and aluminium thereby removing India from Generalised System of Preferences (GSP) that was benefitting Indian businesses.

- Published/Last Modified on: August 15, 2019

Economy, International Relations/Organizations

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