WASHINGTON, Nov 8 — The United States (US) Treasury said no major trading partners appeared to be manipulating their currencies but put Vietnam back onto a foreign exchange “monitoring list,” while removing Switzerland and South Korea from the same scrutiny.
The Treasury’s semi-annual currency report for the four quarters ended June 2023 showed that Vietnam, China, Germany, Malaysia, Singapore, and Taiwan were included on its monitoring list.
These countries exceeded two of three thresholds: a trade surplus with the US above US$15 billion (RM70 billion), a high global current account surplus above three per cent of gross domestic product, and persistent net foreign currency purchases exceeding two per cent of GDP over a year.
The Treasury said Vietnam was returned to the monitoring list after its global current account surplus shot up to 4.7 per cent of GDP during the monitoring period. Vietnam’s exports have proliferated in recent years as companies shift some production to the fast-growing Southeast Asian country from China.
Switzerland and South Korea were taken off the monitoring list after they met only one criterion for two monitoring periods in a row.
Former US president Donald Trump’s administration, at the end of 2020, declared both Vietnam and Switzerland as currency manipulators due to their currency interventions, a move that launched intensive engagement between the US Treasury and Swiss and Vietnamese authorities.
A US Treasury official said Vietnam does not appear to be “slipping” in its foreign exchange practices nor in its engagement with US authorities on currency issues.
There have been some interventions in the foreign exchange markets, notably by Japan, but the official said these have been aimed at propping up currency values against the dollar rather than pushing them down for an export advantage.
The official said China remains on the monitoring list due to a lack of transparency regarding its foreign exchange practices, including the methods and manner of interventions in its yuan currency. The Treasury has estimated China intervened to support the yuan in the latest monitoring period but not to levels that would trigger any thresholds.
— Reuters
