Currency Manipulation Watchlist India YouTube Lecture Handouts

Get unlimited access to the best preparation resource for competitive exams : get questions, notes, tests, video lectures and more- for all subjects of your exam.

India on Currency Manipulation Watchlist by US: What Does It Mean? What Are the 3 Criteria?Economics

Title: Currency Manipulation Watchlist India

Criteria for Currency Manipulation by US Treasury

  • Bilateral trade surplus with the US of more than $ 20 billion
  • Current account surplus of at least 3 percent of Gross Domestic Product (GDP)
  • Net purchases of foreign currency of 2 percent of GDP over 12 months.
  • India meets two out of the three criteria above-mentioned criteria.
  • “While the RBI frequently intervenes in both directions, RBI purchased foreign exchange on net in 11 of the 12 months of 2020, with net intervention reaching $ 131 billion, or 5 percent of GDP,” The report said.
  • India՚s current account registered a surplus of 1.3 percent of GDP 2020, a shift from the consistent current account deficits recorded since 2004, the US Treasury Department said.
  • India՚s goods trade surplus with the United States was $ 24 billion in 2020, as per the report. India also ran an $ 8 billion services trade surplus with the United States in 2020.

11 Nations

  • China, Japan, South Korea, Germany, Ireland, Italy, India, Malaysia, Singapore, Thailand, and Mexico.
  • India was added to the list for a second time in December 2020. It was first added to the list in December 2018, and later removed in 2019.
  • US Treasury Department՚s report said 11 economies warrant placement on “Monitoring List” of major trading partners - China, Japan, South Korea, Germany, Ireland, Italy, India, Malaysia, Singapore, Thailand, and Mexico. Except Ireland and Mexico, all the other countries were in the December 2020 list as well.
  • Over the four quarters through December 2020, five major US trading partners — Vietnam, Switzerland, Taiwan, India, and Singapore — intervened in the foreign exchange market in a sustained, asymmetric manner with the effect of weakening their currencies

Developed by: