US Treasury adds India to monitoring list, Thailand next?

April 17, 2018

WASHINGTON - India has been added to the Monitoring List in the US Treasury’s April semi-annual report to Congress, joining China, Japan, South Korea, Germany, and Switzerland. No economy has been labelled a currency manipulator in the latest report.

ANZ Bank believes there is very little chance that India will meet all three criteria and be called a manipulator, as it has persistently been running current account deficits since 2005.

However, there could be pressure for the RBI to ease off on its foreign exchange intervention, at least to below the threshold of 2% of GDP, ANZ says.

The report noted that the US Treasury is considering expanding the number of economies it covers beyond the current top 12 trading partners.

“Depending on how wide the net is cast, this would put Thailand on notice as it currently meets all three criteria for currency manipulation, but has escaped scrutiny as it is not classified as a major trading partner,” ANZ says.

“This could change at the next report scheduled for October.” www.live.anz.com (ATI).