• 9964432222
  • Mail Us
  • Appointment
  • Locate Us
  • Chat Now
  • Courses
  • Login
  • Register
Manifest IAS
JournalsOfIndia
Advertisement
  • Home
  • SNIPPETSfor Prelims
  • ARTICLESfor Mains
  • BROWSEBY SOURCE
  • DOWNLOADS
No Result
View All Result
  • Home
  • SNIPPETSfor Prelims
  • ARTICLESfor Mains
  • BROWSEBY SOURCE
  • DOWNLOADS
No Result
View All Result
JournalsOfIndia
No Result
View All Result
Home Foreign Affairs

The USA puts India on currency watchlist

December 17, 2020
in Foreign Affairs, Economy
Reading Time: 3 mins read
0
The USA puts India on currency watchlist
272
VIEWS
Share on WhatsAppShare on TelegramShare on Facebook
image_pdfMake PDF

In news

Recently, the United States of America placed India on its currency manipulator watch list for the third time.

A brief note on the issue

  • The USA for the third time placed India on its currency manipulator watch list after the Reserve Bank of India’s relentless dollar purchase that resulted in forex reserves rising by $100 billion this fiscal. 
  • The move was disclosed in the US Treasury’s semi-annual currency manipulation report
  • The USA labelled Switzerland and Vietnam as currency manipulators, and added Taiwan, Thailand and India to the seven others already in the watch list.
  • Countries which are already under watch list are China, Japan, Korea, Germany, Italy, Singapore and Malaysia

Criteria for labeling

The US Treasury has three criteria to label countries as currency manipulators. These are: 

  1. A significant bilateral trade surplus with the US that is at least $20 billion over a 12-month period. 
  2. A material current account surplus that is at least 2% of the gross domestic product (GDP) over a 12-month period. 
  3. Persistent, one-sided intervention when net purchases of foreign currency are conducted repeatedly, in at least 6 out of 12 months, and these net purchases total at least 2% of an economy’s GDP over a 12-month period

What did the US Treasury report say about India’s economy?

  • The report said that India’s deep domestic demand contraction and slower recovery relative to its key trading partners contributed to the economy’s first four-quarter current account surplus since 2004 (0.4% of the GDP over the year to June 2020). 
  • As per the report, India for several years has maintained a significant bilateral goods trade surplus with the US, which totalled $22 billion in the four quarters through June 2020.
  • Based on the central bank’s regularly published intervention data, India’s net purchases of foreign exchange accelerated notably in the second half of 2019, 
    • The sales during the initial onset of the pandemic, India sustained net purchases for much of the first half of 2020. 
    • This pushed net purchases of foreign exchange to $64 billion, or 2.4% of the GDP, over the four quarters through June 2020.
  • Referring to India’s inclusion in the watch list  the report said that  
    • the treasury encourages the authorities to limit foreign exchange intervention to periods of excessive volatility, while allowing the rupee to adjust based on economic fundamentals. 
    • By further opening the economy to foreign investors, India can also support economic recovery and bolster long-term growth.
  • According to it, India has historically argued that it is an outlier when it comes to currency intervention as it is the only country with sizeable reserves and historically a large current account deficit. 
  • The argument against manipulators is that they have an unfair advantage in trade by manipulating the exchange rate.
image_pdfMake PDF
Source: Times of India
Tags: Prelims

Related Posts

Association of Asian Election Authorities (AAEA)

Association of Asian Election Authorities (AAEA)

May 13, 2022
Roe v Wade case

Roe v Wade case

May 9, 2022
India-Nordic summit

India-Nordic summit

May 6, 2022
Gold hallmarking

Gold hallmarking

May 4, 2022
Cannes Film Festival, 2022

Cannes Film Festival, 2022

May 4, 2022
MSME Sustainable (ZED) Certification Scheme

MSME Sustainable (ZED) Certification Scheme

May 3, 2022
United Nations Mission in South Sudan (UNMISS)

United Nations Mission in South Sudan (UNMISS)

May 3, 2022
India Semiconductor Mission

India Semiconductor Mission

May 3, 2022
World Book and Copyright Day, 2022

World Book and Copyright Day, 2022

April 30, 2022
Global Security Initiative

Global Security Initiative

April 30, 2022
Please login to join discussion
JournalsOfIndia

Our vision is to orient the readers to grasp the facts objectively and analyse critically. In the rush of reaching first to the readers, the websites miss the balanced opinion, which is the need of the hour. We aim to reach the readers with more crispness, preciseness and relevance. We bring the articles in UPSC way for the civil services aspirants and the Wisest Way for general readers.

Categories

  • Agriculture
  • Disaster Management
  • Economy
  • Environment
  • Ethics
  • Foreign Affairs
  • Geography
  • Governance
  • History
  • Law & Policy
  • Opinion
  • People in News
  • Places in News
  • Science & Tech
  • Security
  • Society
  • Sports
  • Uncategorized

Browse by Tag

AIR BBC Business Standard CNN Deccan Herald DownToEarth Down to Earth DTE Economic Times ET GS-1 GS-2 GS-3 GS-4 Hindustan Times IE India & the world Indian express India today Indiatoday Kurukshetra LiveMint Mains News News Paper Newspaper PIB PIB & The Hindu pre Prelims PRS India RSTV Science Reporter Survey The Hindu The Hindustan Times The India Express The Indian Express The New Indian Express Times of India TOI TOPPERS UNDP website Wikipedia Yojana

Newsletter

The most important UPSC news and events of the day.

Get Journals daily newsletter on your inbox.

© 2020 JournalsOfIndia - A free initiative by Manifest Team.

  • Login
  • Sign Up
  • Home
  • SNIPPETS
  • ARTICLES
  • BROWSE
  • DOWNLOADS
No Result
View All Result

© 2020 JournalsOfIndia - A free initiative by Manifest Team.

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In