Thailand currency

US adds Taiwan and Vietnam to currency watch list that includes Thailand

U.S. dollar banknotes are shown in this illustration taken on February 14, 2022. (Photo Reuters)

No major U.S. trading partner like China has been accused of manipulating its currency, but Taiwan and Vietnam have been added to a “watch list” for exchange rate policies, the Treasury Department said on Friday.

Washington will also continue to “closely monitor” China’s actions and has again raised concerns about Beijing’s “lack of transparency” in its moves to influence currency markets, the Treasury said in its semi-annual report. American in Congress.

The report looks at countries with large trade surpluses that actively intervene in foreign exchange markets to prevent their currencies from appreciating, making their exports more competitive.

The Treasury has put 12 countries on the watch list: China, Japan, South Korea, Germany, Italy, India, Malaysia, Singapore, Thailand, Taiwan, Vietnam and Mexico.

Two countries – Ireland and Switzerland – have been removed from the list since the December report. Switzerland was declared a currency manipulator in December 2020, and continues to be the subject of “enhanced” discussions.

Beijing has long been the target of intense scrutiny, and Washington has frequently accused the government of keeping the exchange rate artificially low via its massive stockpile of US dollars, undermining American manufacturers and workers.

“China’s inability to publish foreign exchange interventions and the broader lack of transparency around key features of its exchange rate mechanism make it an exception among major economies, and the activities of China’s state-owned banks in particular justify close monitoring by the Treasury,” the Treasury said in the report.

The Chinese renminbi appreciated 4.4% against the US dollar in real terms and continued to strengthen at the start of this year until April, when it quickly weakened due to “the ‘dimming growth outlook’, according to the report.

A treasury official noted that the country “faces unique challenges” such as inflows of money in search of a safe haven, including “when Russia’s war against Ukraine began.”

“We continue to discuss these issues,” the official told reporters.

With Switzerland, “we also have a new permanent macroeconomic and financial dialogue” to deal with the issues, the official said.

The Treasury reviewed 20 major U.S. trading partners whose two-way merchandise trade with the United States was at least $40 billion a year.

The criteria are a large trade surplus with the United States, a large current account surplus and evidence of “persistent and unilateral intervention” in foreign exchange markets.