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News: The United States has added India along with Taiwan and Thailand to the ‘monitoring list’ of currency manipulating countries that includes major trading partners like China and six others.
Facts:
- Currency Manipulator: The US Treasury department defines currency manipulation as when countries deliberately influence the exchange rate between their currency and the US dollar to gain unfair competitive advantage in international trade.
- Criteria: To be labeled a manipulator by the U.S. Treasury, countries must fall under below mentioned criteria.
- Country should atleast have a $20 billion-plus bilateral trade surplus with the U.S.
- Foreign currency intervention exceeding 2% of gross domestic product and
- Global current account surplus exceeding 2% of GDP.
- Implications: Once a country is designated as a currency manipulator by the U.S., the next step taken by the US government is to seek negotiations with the government accused of manipulation
