{"id":14864,"date":"2021-04-19T00:00:00","date_gmt":"2021-04-19T00:00:00","guid":{"rendered":"https:\/\/www.nextias.com\/current_affairs\/uncategorized\/19-04-2021\/india-on-currency-monitoring-list\/"},"modified":"2021-04-19T00:00:00","modified_gmt":"2021-04-19T00:00:00","slug":"india-on-currency-monitoring-list","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/19-04-2021\/india-on-currency-monitoring-list","title":{"rendered":"India on Currency Monitoring List"},"content":{"rendered":"<p>\u00a0<\/p>\n<p><strong>In News<\/strong><\/p>\n<p>Recently, <strong>India <\/strong>has been put on the <strong>U.S. Treasury\u2019s Currency Manipulators Monitoring List <\/strong>along with 10 other countries for the <strong>April 2021 list<\/strong>.<\/p>\n<ul>\n<li>Other <strong>10 countries<\/strong> are China, Japan, Korea, Germany, Ireland, Italy, Malaysia, Singapore, Thailand and Mexico.\n<ul>\n<li>All of these, except Ireland and Mexico, were on the December 2020 list.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>Currency Manipulators<\/strong><\/p>\n<ul>\n<li>The US government gives this <strong>label to countries<\/strong> which it feels are engaging in unfair currency practices by <strong>intentionally devaluing their currency against the US Dollar<\/strong>.\n<ul>\n<li>It means that the enlisted nation is <strong>artificially lowering the value of its currency<\/strong> to gain an unfair advantage over others as the <strong>devaluation reduces the cost of exports <\/strong>from that country and <strong>artificially shows a reduction in trade deficits<\/strong> as a result.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Currency Manipulator Watch List<\/strong>\n<ul>\n<li>The <strong>US Department of Treasury<\/strong> releases the report titled \u2018<strong>Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States<\/strong>\u2019.<\/li>\n<li>The <strong>semi-annual<\/strong> report <strong>reviews currency practices<\/strong> of the US\u2019s <strong>20 biggest trading partners<\/strong> to track developments in international economies and inspect foreign exchange rates.<\/li>\n<li><strong>Three criteria<\/strong> from the <strong>Trade Facilitation and Trade Enforcement Act of 2015 <\/strong>are used to review partners and an economy<strong> meeting two of the three criteria is placed <\/strong>on the Watch List.\n<ul>\n<li>A <strong>significant bilateral trade surplus <\/strong>(at least USD 20 billion over a 12-month period).<\/li>\n<li>A <strong>material current account surplus<\/strong> (at least 2 per cent of GDP over a 12-month period).<\/li>\n<li>\u2018<strong>Persistent one-sided intervention<\/strong>\u2019 in forex markets (net purchases of foreign currency totalling at least 2 per cent of the country\u2019s GDP over a 12 month period are conducted repeatedly, in at least six out of 12 months).<\/li>\n<\/ul>\n<\/li>\n<li><strong>Implications on the Enlisted Country<\/strong>\n<ul>\n<li>It <strong>deteriorates the financial image <\/strong>of a country in the markets with respect to the foreign exchange policies including undervaluation of currencies to gain export advantages.<\/li>\n<li>However, inclusion in the list <strong>does not lead to any kind of penalty and sanctions<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>India\u2019s Current Position<\/strong><\/p>\n<ul>\n<li>According to the US Treasury Department, India <strong>met two of the three criteria<\/strong>, viz. the trade surplus criterion and the \u201cpersistent, one-sided intervention\u201d criterion.<\/li>\n<li>India was <strong>on the list in the December 2020<\/strong> report as well.<\/li>\n<li>The status can <strong>lead to the rupee appreciating<\/strong> as the <strong>Reserve Bank of India<\/strong> (RBI) might step back from its dollar purchases.<\/li>\n<\/ul>\n<p><img decoding=\"async\" src=\"https:\/\/cfstatic.nextias.com\/cdn-cgi\/image\/format=auto\/file_library\/mix_content\/435473481463403300_image.png\" style=\"height:266px; margin-left:80px; margin-right:80px; width:588px\" \/><\/p>\n<p>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0(Image Courtesy: <a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/rupee-may-rise-as-us-puts-india-back-on-currency-watch-list\/articleshow\/79768340.cms\" target=\"_blank\" rel=\"noopener\">TOI<\/a>)<\/p>\n<p>Source: <a href=\"https:\/\/www.thehindu.com\/business\/us-treasury-keeps-india-on-currency-watch-list\/article34339096.ece#:~:text=India%20is%20one%20of%20the,December%202020%20report%20as%20well.\" target=\"_blank\" rel=\"noopener\">TH<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u00a0 In News Recently, India has been put on the U.S. Treasury\u2019s Currency Manipulators Monitoring List along with 10 other countries for the April 2021 list. Other 10 countries are China, Japan, Korea, Germany, Ireland, Italy, Malaysia, Singapore, Thailand and Mexico. All of these, except Ireland and Mexico, were on the December 2020 list. Currency [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":14865,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[97,57,30,26,34,46,42,29],"class_list":["post-14864","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs","tag-architecture","tag-effect-of-policies-politics-of-developed-developing-countries-on-indias-interests","tag-gs-2","tag-gs-3","tag-india-foreign-relations","tag-indian-economy-related-issues","tag-literature","tag-thehindu"],"acf":[],"jetpack_featured_media_url":"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2023\/07\/207121current-affairs.jpg","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/14864","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=14864"}],"version-history":[{"count":0,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/14864\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media\/14865"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=14864"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=14864"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=14864"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}