GS-PAPER II- IAS MAINS- TOPIC- INTERNATIONAL RELATIONS - India removed from currency monitoring list

Context:

In its semi-annual foreign exchange report presented to Congress, the US administration dropped the names of India and Switzerland from its currency monitoring list.

Background:

• 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.
• In its next report in October 2018, the Treasury had said that India has made improvements and its name would be removed from the currency manipulation list in the next report.

Details:

• India name was dropped from its currency monitoring list of major trading partners after certain developments and steps were taken by the country to avert concerns surrounding foreign exchange irregularities.
• The list currently includes China, Japan, South Korea, Germany, Italy, Ireland, Singapore, Malaysia, and Vietnam.

Significance:

• This is a positive development for India as it is out of the currency watch list radar, which could have ultimately led to a tag of being a currency manipulator.
• The US Department of Treasury releases the semi-annual report where it has to track developments in international economies and inspect foreign exchange rates. If any trade partner of the US meets a three-assessment review, bilateral talks are held to resolve the issues.
• Countries which indulge in manipulating the currency exchange rate for gaining unfair competitive advantage in international trade often end up with the tag of a currency manipulator.

Q : What are the benefits of the dropping of the name of India from the Currency Monitoring List by the United States ? -125 Words 

Courtesy 

byju.com