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17/12/20 13:52 PM IST

US Puts India Back on Currency Manipulation Watchlist

In news

The US has put India on its “monitoring list” of currency manipulating countries for the third time.

Details
  • This came after the Reserve Bank of India (RBI) made relentless dollar purchase, leading to forex reserves rising by $100 billion this fiscal.
  • Along with India, Taiwan, Thailand Vietnam and Switzerland were also branded as currency manipulators.
  • India had been removed from the watch list last year.
The U.S. Treasury uses three benchmarks to judge currency manipulators
  • A bilateral trade surplus with the U.S. of more than $20 billion.
  • A current account surplus of at least 3% of GDP.
  • Net purchases of foreign currency of 2% of GDP over a 12-month period.
Why India has been included in the list?
  • India breached the first and the third benchmarks.
  • On the second, on a four-quarter basis, the country’s current account surplus remained below the threshold level.
  • According to the report, net purchases of foreign currency added up to 2.4% of GDP.
Source: The Hindu

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