The United States has removed South Korea from its list of countries subject to monitoring of its exchange rate policy, for the second time in a row, while adding Japan to the list, a report from the US Treasury Department.
The department published the semiannual report to Congress on macroeconomic and exchange rate policies of the main US trading partners, after its November reportin which South Korea was delisted for the first time since April 2016. The latest monitoring list includes China, Japan, Taiwan, Malaysia, Singapore, Vietnam and Germany.
Criteria and compliance: Who are the US trading partners under the Trade Facilitation and Enforcement Act?
U.S. trading partners are included on the list when they meet two of the three criteria established by the U.S. Trade Facilitation and Enforcement Act of 2015, also known as the 2015 Act.
South Korea declares a national demographic emergency
The criteria are a bilateral trade surplus of at least $15 billion with the US, a material current account surplus of at least 3 percent of the country’s gross domestic product (GDP), and persistent, unilateral intervention in the foreign exchange market in at least eight months of a year, with net purchases amounting to at least 2 percent of the economy’s GDP over a 12-month period.
According to the report, Japan, Taiwan, Vietnam and Germany meet the criteria for having a significant bilateral surplus and a material current account surplus, and Singapore meets the criteria for engaging in persistent and unilateral currency intervention and having a material current account surplus. .
In the case of Malaysia, it met two of the points required in the last report, but only the significant bilateral surplus criterion in this report.
As for China, the department reported that Beijing’s failure to disclose its currency intervention and a broader lack of transparency around key features of its exchange rate mechanism continues to make it an outlier among major economies and justifies its close surveillance.
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