The Trump administration removed India from its currency monitoring list of major trading partners. It cited certain developments and steps being taken by New Delhi which address some of its major concerns.
Switzerland is the other nation that has been removed by the US from its currency monitoring list. The list includes other countries like China, Japan and Germany.
India has been removed from the monitoring list in the latest semi-annual report on macroeconomic and foreign exchange policies of major trading partners of the US. The Treasury Department reasoned that India had met only one out of three criteria – a significant bilateral surplus with the US – for two consecutive reports.
After purchasing foreign exchange on net in 2017, the central bank steadily sold reserves for most of 2018, with net sales of foreign exchange reaching 1.7 per cent of GDP over the year.
The report added that India maintains ample reserves according to the IMF metrics for reserve adequacy.
In both Switzerland and India, there was a notable decline in 2018 in the scale and frequency of foreign exchange purchases, the report observed.
India for the first time was placed by the US in its currency monitoring list of countries with potentially questionable foreign exchange policies in May 2018 along with five other countries – China, Germany, Japan, South Korea and Switzerland.
Meanwhile, even as it still kept China on a list of countries whose trade surpluses with the US and other indicators are closely tracked, the administration once again refused to label China as a currency manipulator.