{"id":2891,"date":"2020-12-28T11:47:26","date_gmt":"2020-12-28T06:17:26","guid":{"rendered":"https:\/\/www.classiciasacademy.com\/blog\/?p=2891"},"modified":"2020-12-28T11:47:26","modified_gmt":"2020-12-28T06:17:26","slug":"is-india-a-currency-manipulator","status":"publish","type":"post","link":"https:\/\/www.classiciasacademy.com\/blog\/is-india-a-currency-manipulator\/","title":{"rendered":"Is India a Currency Manipulator?"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><strong>In News<\/strong><\/h3>\n\n\n\n<p>The United States of America has recently put India under a\ncurrency manipulation watch list. Is India a currency manipulator? Let\u2019s find\nout. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>In-Detail<\/strong><\/h3>\n\n\n\n<p>The US has put India on a monitoring list of countries with\npotentially \u201cquestionable foreign exchange policies\u201d and \u201ccurrency\nmanipulation\u201d. <\/p>\n\n\n\n<p>This comes after a year India had been removed from the list by\nthe US Treasury Department.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>The\nMeaning of Currency Manipulator<\/strong><\/h3>\n\n\n\n<p>The US government labels any country that is engaged in\nwilfully devaluing its currency against the dollar as a currency manipulator. <\/p>\n\n\n\n<p>IT means the country in question is lowering its currency value\nintentionally to be advantageous over other countries.<\/p>\n\n\n\n<p>Devaluation reduces export costs and artificially shows a\nreduction in trade deficits.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Labeling\nCurrency Manipulator &#8211; The Parameters<\/strong><\/h3>\n\n\n\n<ul><li>As per the US\u2019 Trade Facilitation and Trade Enforcement\nAct of 2015, an economy is placed under the monitoring list if it meets two to\nthree of the following criteria:<\/li><li>Over a 12-month period, the country in question must\nhave a significant trade surplus with the US, at least $20 billion.<\/li><li>The material current account of the country is in a\nsurplus of at least 2 percent of GDP over a period of 12 months.<\/li><li>Over a 12-month period, the country should have carried\nout net foreign currency purchases totaling at least 2% of the GDP. <\/li><\/ul>\n\n\n\n<ul><li>Once a country is on the monitoring list, it will stay\nthere for at least two reports. This is to help the US Treasury ensure that the\nimprovement in a country\u2019s performance is durable and not due to temporary\nfactors.<\/li><li>Also, any major US trading partner with a large and\ndisproportionate share in the US trade deficit will be added and retained on\nthe list. This, even if that country has not met any two of the three criteria\nmentioned in the Act.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Countries\nOn the List<\/strong><\/h3>\n\n\n\n<ul><li>In the latest monitoring list, the US Department of\nTreasury included India, Thailand, and Taiwan to the list. <\/li><li>The Department warranted close attention on these major\ntrading partners due to their currency practices and macroeconomic policies.<\/li><li>Other countries on the list are Germany, China, Japan,\nItaly, Korea, Malaysia, and Singapore.<\/li><li>India was included on the watchlist in 2018 and was\nremoved in May 2019. <\/li><li>The name of a country on the list means it does not\nimmediately attract any penalties, but it will dent its confidence in global\nfinancial markets.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Return\nof India On the List<\/strong><\/h3>\n\n\n\n<ul><li>India has a significant bilateral goods surplus with the\nUS for several years crossing the $20 billion mark. <\/li><li>Up until June 2020, India\u2019s goods trade surplus\nincreased to $22 billion.<\/li><li>The report notes that India\u2019s central bank RBI had\npurchased significant amounts of foreign exchange in the second half of 2019<\/li><li>This, followed by the net purchase of foreign exchange\nin the first half of 2020 which amounted to $64 billion or 2.4% of the GDP.<\/li><li>This is why India is on the list.<\/li><\/ul>\n","protected":false},"excerpt":{"rendered":"<div class=\"mh-excerpt\"><p>In News The United States of America has recently put India under a currency manipulation watch list. Is India a currency manipulator? Let\u2019s find out. <a class=\"mh-excerpt-more\" href=\"https:\/\/www.classiciasacademy.com\/blog\/is-india-a-currency-manipulator\/\" title=\"Is India a Currency Manipulator?\">    [read more]<\/a><\/p>\n<\/div>","protected":false},"author":1,"featured_media":2892,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[98],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Is India a Currency Manipulator? - UPSC Current Affairs<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.classiciasacademy.com\/blog\/is-india-a-currency-manipulator\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Is India a Currency Manipulator? - UPSC Current Affairs\" \/>\n<meta property=\"og:description\" content=\"In News The United States of America has recently put India under a currency manipulation watch list. 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