The United States Treasury on Saturday added India to the watch list of countries with potentially questionable foreign exchange policies. India joined China, Germany, Japan, Korea and Switzerland on the currency list, said report. The regulatory treasury includes the major trading partners to the monitoring list that merits and keeps a close eye on their currency practices. These countries remain on the list for two report cycles “to help ensure that any improvement in performance versus the criteria is durable and is not due to temporary factors.”
The 5 countries of the list meet 2 of the 3 conditions of the criteria set by US treasury board. As per the report, China was included because “it constitutes a disproportionate share of the overall US trade deficit.” The latest government data shows that the United State has a deficit of $337 billion with China of a total global trade deficit of USD 566 billion.
Steven Mnuchin, Secretary, US Treasury reportedly said that “We will continue to monitor and combat unfair currency practices while encouraging policies and reforms to address large trade imbalances.”
The US Treasury is trying to filter and identify those countries that are trying to artificially manage the value of their currency to gain a trade advantage. Some countries keep their exchange rate low to promote cheaper exports.
The report reads, “India, which has a $23 billion trade surplus with the United States, increased its purchases of foreign exchange over the first three quarters of 2017,” although the rupee still rises in its value.For all the latest Business News, download NewsX App