U.S. puts India on ‘currency manipulators’ monitoring list

The U.S. Treasury labeled Switzerland and Vietnam as currency manipulators on Wednesday and added three new names, including India, to a watch list of countries it suspects of taking measures to devalue their currencies against the dollar.

In what may be one of the last broadsides to international trading partners by the departing administration of President Donald Trump, the U.S. Treasury said that in the year through June 2020 Switzerland and Vietnam had intervened heavily in currency markets to prevent effective balance of payments adjustments.

In response, the Swiss National Bank said it does not manipulate its currency and its monetary policy approach would be unchanged, adding that it “remains willing to intervene more strongly in the foreign exchange market”.

Vietnam’s trade ministry declined to comment on the report and referred questions to the foreign ministry.

Treasury’s criteria

To be labeled a manipulator by the U.S. Treasury, countries must at least have a $20 billion-plus bilateral trade surplus with the U.S., foreign currency intervention exceeding 2% of gross domestic product and a global current account surplus exceeding 2% of GDP.

India’s intervention

The Treasury also said its “monitoring list” of countries that meet some of the criteria has hit 10, with the additions of Taiwan, Thailand and India. Others on the list include China, Japan, Korea, Germany, Italy, Singapore and Malaysia.

The report also said that India and Singapore had also intervened in the foreign exchange market in a “sustained, asymmetric manner” but did not meet other requirements to warrant designation as manipulators.