Question: Which of the following country is recently removed from the US currency monitoring list?
(a) China
(b) Saudi Arabia
(c) India
(d) Turkey
Answer: (c)
Related facts:
- The Trump Administration in US has removed India from its currency monitoring list of major trading partners on May 28, 2019.
- The Treasury Department in the latest semi-annual list does not mention India in it.
- India was enlisted in the bi-annual currency watch list in October last year along with China, Japan, Germany, Switzerland and South Korea.
The list:
- The new list does not mention India and Switzerland.
- Ireland, Italy, Malaysia, Singapore and Vietnam are the latest additions while China continuing to figure in it along with Japan, South Korea, Germany, Ireland, Italy, Malaysia, Vietnam and Singapore.
- While the designation of a country as a currency manipulator does not immediately attract any penalties, it tends to decrease the confidence about a country in the global financial markets.
Criteria of listing:
- Countries with a current-account surplus equivalent to 2 per cent of gross-domestic product are eligible for the list which was 3 per cent earlier.
- Other thresholds include repeated intervention in the currency markets and a trade surplus with the US of at least $20 billion.
- These policies are used by Trump administration to discourage countries hurting American businesses and consumers.
- US is currently facing a trade war with China and has also imposed severe tariffs over Mexico too.
- China’s goods trade surplus with US stands at $419 billion over the four quarters through December 2018.
Links:
https://www.indiatoday.in/business/story/india-removed-from-us-currency-watchlist-what-it-means-1537434-2019-05-29
https://www.business-standard.com/article/news-ians/india-removed-from-us-currency-monitoring-list-china-stays-119052900140_1.html
https://indianexpress.com/article/explained/why-has-us-removed-india-from-its-currency-monitoring-watchlist-5754473/