India Among 12 Economies On Currency Monitoring List Of US Treasury

06/12/2022

New Delhi, June 12: India on Friday remained on the US treasury department's currency Monitoring List of major trading partners as Washington placed India along with 11 other major economies that merit close attention to their currency practices and macroeconomic policies.

The countries are China, Japan, South Korea, Germany, Italy, India, Malaysia, Singapore, Thailand, Taiwan, Vietnam and Mexico, said the US Department of Treasury in its semi-annual Report to Congress on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States.

All except Taiwan and Vietnam (which were subject to enhanced engagement) were on the Monitoring List in the December 2021 Report, a media release said.

The Administration continues to strongly advocate for our major trading partners to carefully calibrate policy tools to support a strong and sustainable global recovery. An uneven global recovery is not a resilient recovery. It intensifies inequality, exacerbates global imbalances and heightens risks to the global economy," said Secretary of the Treasury Janet L Yellen.

Explaining its decision to keep India on the list, the Treasury said that India met two of the three criteria in the December 2021 and the April 2021 Reports, having a significant bilateral trade surplus with the US and engaged in persistent, one-sided intervention over the reporting period.

India met only the significant bilateral trade surplus threshold in this Report, the Treasury said, adding that India will remain on the Monitoring List until it meets fewer than two criteria for two consecutive Reports.

According to the report, India (with USD 569.9 billion) has the fourth largest foreign exchange after China (USD 3.2 trillion), Japan (USD 1.2 trillion) and Switzerland (USD 1 trillion).

RBI foreign exchange purchases in recent years have resulted in an elevated level of reserves. As of December 2021, foreign exchange reserves totalled USD 570 billion, equivalent to 18 per cent of GDP and 209 per cent of short-term external debt at remaining maturity, it said.

In the 2021 External Sector Report, the IMF judged that India's reserves at the time stood at 197 per cent of the IMF's reserve adequacy metric as of end-2020.

The Treasury said that similar to many Asian emerging market peer currencies, the rupee weakened against the US dollar over the course of 2021, depreciating by 1.9 per cent.

Rupee volatility was pronounced during the first half of 2021 as the economy contended with the large, second Covid-19 outbreak; subsequently, the rupee depreciated steadily against the dollar during most of the second half of the year, it said.

By contrast, the rupee held up relatively well compared to the currencies of many India's regional trading partners -- on a nominal effective and real effective basis, the rupee appreciated 0.8 per cent and 2.2 per cent over 2021, respectively, said the report.

The Indian authorities, it said, should allow the exchange rate to move flexibly to reflect economic fundamentals, limit foreign exchange intervention to circumstances of disorderly market conditions, and refrain from further significant reserve accumulation.

As the economic recovery progresses, the authorities should continue to pursue structural reforms that can help lift productivity and living standards, while supporting an inclusive and green recovery, the Treasury added.-PTI

Related News

Joe Biden praises Olympians for inspiring Americans with courage

Wilmington, Aug. 8: US President Joe Biden praised US Olympians for navigating the difficulties of a coronavirus-tarnished games with “moral courage” that made Americans’ “hearts swell” with pride. Biden, along with first lady Jill Biden, spoke with Team USA in a Zoom call Saturday evening from their home near Wilmington,…

Another northern Afghan province falls to Taliban: Officials

Kabul, Aug. 9: Provincial Afghan lawmakers say the Taliban have taken control of another provincial capital, the fourth to fall into insurgent hands in less than a week, in a punishing blow to government forces. The Taliban forces overran Taleqan, the capital of the northern Takhar province on Sunday, capturing…

Maritime routes are being misused for piracy and terrorism, says Indian PM

New Delhi, Aug. 9: Indian Prime Minister Narendra Modi is chairing a UN Security Council open debate on “Enhancing Maritime Security — A Case for International Cooperation” on Monday evening via video conferencing. The focus of the debate was to focus on ways to effectively counter maritime crime and insecurity,…

Indian PM for joint efforts to fight maritime threats

New Delhi, Aug. 10 : In an oblique reference to China, Indian Prime Minister Narendra Modi on Monday called for maritime disputes to be resolved peacefully and in accordance with international law. Speaking at one of the best-attended UN Security Council debates (UNSC) where other members, barring China, fielded Presidents,…

Taliban tighten control of Afghan north as UN fears erasure of human rights

Kabul, Aug. 10: Taliban fighters tightened their grip on captured territory in Afghanistan on Tuesday as civilians hid in their homes and a pro-government commander vowed to fight to the death to defend Mazar-i-Sharif, the biggest city in the north. President Ashraf Ghani called on regional strongmen to support his…

As Taliban gain ground, Afghanistan army chief ‘replaced’

Kabul, Aug. 12: As the Taliban seized three more provincial capitals in Afghanistan and a local army headquarters, a Defence Ministry official and local media reports said President Ashraf Ghani had replaced the country’s army chief. Sources said Gen Hibatullah Alizai had replaced Gen Wali Ahmadzai as the Afghan army…

Video

Find Us on Facebook

From Social

Kathmandu, Nov. 24: The joint training exercise "SURYA KIRAN-XVII" of Nepali Army and Indian Army is starting from 24 November 2023 in Pithoragarh, India. The Nepalese army team that will participate in the exercise, which will be attended by the…

Nepal-India Joint Military Training Excerise Surya Kiran Begin Today    

New Delhi, May 5: Indian Prime Minister Narendra Modi will be the guest of honour for this year’s Bastille Day Parade in Paris scheduled to take place on July 14.  In a statement, the Ministry of External Affairs (MEA) of…

Indian PM Modi to attend Bastille Day Parade in Paris as guest of honour on July 14