Washington, May 29
The US on Tuesday removed India from its currency monitoring list of major trading partners, citing steps being taken by New Delhi which addressed some of the Trump administration’s major concerns.
For the first time, the US placed India in its currency monitoring list of countries in May 2018 with potentially questionable foreign exchange policies.
Switzerland is the other nation that has been removed from the list, which among others includes China, Japan, South Korea, Germany, Italy, Ireland, Singapore, Malaysia and Vietnam.
“India has been removed from the monitoring list in this report, having met only one out of three criteria — a significant bilateral surplus with the US — for two consecutive reports,” the Treasury Department said in its latest semi-annual report on macroeconomic and foreign exchange policies of major trading partners of the US sent to the Congress.
After purchasing foreign exchange on net in 2017, the central bank, Reserve Bank of India, steadily sold reserves for most of 2018, with net sales of foreign exchange reaching 1.7 per cent of GDP over the year, it said.
India maintains ample reserves according to the IMF metrics for reserve adequacy, the Treasury Department said in its report. In both Switzerland and India, there was a notable decline in 2018 in the scale and frequency of foreign exchange purchases, the report said. — PTI
Key parameters
- 2% of GDP or higher current-account surplus with US makes country eligible to be on watch list
- $20 bn or higher trade surplus, persistent intervention in markets for a nation’s currency other two thresholds
- 2 of the three criteria can put countries on the watch list. India meets only one — trade surplus
- 1.7% of GDP is where net sales of India’s foreign exchange stand. RBI sold reserves for most of 2018
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from The Tribune http://bit.ly/2I9F8ST
via Today’s News Headlines
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