The Trump administration of the United States stopped short of labeling China as a currency manipulator once again thereby potentially avoiding an aggravation of the currently acrimonious trade war between the two countries which are also the two largest economies of the world.
No country was named as a manipulator of their own currencies in the semi-annual foreign-exchange report to Congress issued by the US Treasury Department. However that report included the names of nine countries which have been put on a watch list by the US because those countries meet certain criteria set by the US administration for possible currency manipulation. There are five new additions in the list of nine countries - Ireland, Italy, Vietnam, Singapore and Malaysia. The other four countries that have previously been put on the watch list by the US Treasury Department are China, Japan, South Korea and Germany. US removed India and Switzerland from the watch list.
According to a senior Treasury official, the department had made some changes to its criteria for evaluating countries which caused a delay in the publication of the report which was earlier scheduled to be released officially in mid-April.
There are no immediate penalties imposed on countries that are designated to be currency manipulators by the US but there can have significant impact on financial markets. According to an earlier report by Bloomberg News earlier this month, there was a high chance of Vietnam being designated as a currency manipulator but that was cancelled after a visit to Washington of the officials of the country last week.
Free and fair trade was supported by it and no unfair currency practices were used by it, said Malaysia’s central bank. It also added that there would be no immediate impact on the economy of the country because of its inclusion in the list. There were no comments available in the media from officials in Singapore and Vietnam.
The latest tool that is being used by US President Donald Trump in his efforts to bring changes to global trade rules is currency policy. According to allegations by Trump, the US economy, and the American business and consumers have been hurt by the current rules of global trade. This issue of foreign-exchange policy formed found critical importance in the trade negotiations of the US with Mexico, Canada and South Korea. Analysts also expect this to an important aspect in the US-China trade agreement if the countries manage to come to an agreement.
Following the lowering of the threshold for qualification by Treasury Secretary Steven Mnuchin resulted in the increase in the number of countries on the U.S. watch list.
“Treasury takes seriously any potentially unfair currency practices, and Treasury is expanding the number of U.S. trading partners it reviews to make currency practices fairer and more transparent,” he said in a statement.
No major trade partner of the US has been labeled as a currency manipulator since 1994 by the US.
According to the new criteria, those countries that have a current-account surplus of 2 per cent of gross-domestic product of the US are now eligible for the list. The earlier parameter was 3 per cent of the US GDP. The other criteria for evaluation of countries as a currency manipulators include continued intervention in markets for a country’s currency along with a minimum of $20 billion of trade surplus with the US.
(Source:www.bloomberg.com)
No country was named as a manipulator of their own currencies in the semi-annual foreign-exchange report to Congress issued by the US Treasury Department. However that report included the names of nine countries which have been put on a watch list by the US because those countries meet certain criteria set by the US administration for possible currency manipulation. There are five new additions in the list of nine countries - Ireland, Italy, Vietnam, Singapore and Malaysia. The other four countries that have previously been put on the watch list by the US Treasury Department are China, Japan, South Korea and Germany. US removed India and Switzerland from the watch list.
According to a senior Treasury official, the department had made some changes to its criteria for evaluating countries which caused a delay in the publication of the report which was earlier scheduled to be released officially in mid-April.
There are no immediate penalties imposed on countries that are designated to be currency manipulators by the US but there can have significant impact on financial markets. According to an earlier report by Bloomberg News earlier this month, there was a high chance of Vietnam being designated as a currency manipulator but that was cancelled after a visit to Washington of the officials of the country last week.
Free and fair trade was supported by it and no unfair currency practices were used by it, said Malaysia’s central bank. It also added that there would be no immediate impact on the economy of the country because of its inclusion in the list. There were no comments available in the media from officials in Singapore and Vietnam.
The latest tool that is being used by US President Donald Trump in his efforts to bring changes to global trade rules is currency policy. According to allegations by Trump, the US economy, and the American business and consumers have been hurt by the current rules of global trade. This issue of foreign-exchange policy formed found critical importance in the trade negotiations of the US with Mexico, Canada and South Korea. Analysts also expect this to an important aspect in the US-China trade agreement if the countries manage to come to an agreement.
Following the lowering of the threshold for qualification by Treasury Secretary Steven Mnuchin resulted in the increase in the number of countries on the U.S. watch list.
“Treasury takes seriously any potentially unfair currency practices, and Treasury is expanding the number of U.S. trading partners it reviews to make currency practices fairer and more transparent,” he said in a statement.
No major trade partner of the US has been labeled as a currency manipulator since 1994 by the US.
According to the new criteria, those countries that have a current-account surplus of 2 per cent of gross-domestic product of the US are now eligible for the list. The earlier parameter was 3 per cent of the US GDP. The other criteria for evaluation of countries as a currency manipulators include continued intervention in markets for a country’s currency along with a minimum of $20 billion of trade surplus with the US.
(Source:www.bloomberg.com)
