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Currency manipulator watchlist
- The United States Treasury department has retained India on its currency manipulation watchlist.
Details:
- India was first added to the list in December 2018. Later it was removed in 2019.
- Then India was added to the list for the second time in December 2020.
- According to US, India along with others in the list have intervened in the foreign exchange for the purpose of weakening their currencies.
Criteria:
- The US Treasury Department uses the following three criterias to assess whether an economy has manipulated its currency or not:
(1) Bilateral trade surplus with the US of more than $20 billion.
(2) Current account surplus of at least 3 percent of Gross Domestic Product (GDP).
(3) Net purchases of foreign currency of 2 percent of GDP over 12 months.
- India meets two out of the three criteria above-mentioned criteria.
- As per US, 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.
Source: The Hindu.