US Removed from Currency Watchlist with South Korea... China, Germany and 6 Other Countries Designated (Comprehensive)

The U.S. Department of the Treasury announced on the 7th (local time) the "2023 Second Half Exchange Rate Report," which newly includes Vietnam in the list of currency monitoring countries, excluding South Korea and Switzerland.

Under the Trade Facilitation and Trade Enforcement Act enacted in 2015, the U.S. evaluates the macroeconomic and exchange rate policies of the top 20 countries with which it has significant trade volume and designates them as either enhanced analysis countries or monitoring countries if they meet certain criteria.

The current criteria include a trade surplus with the U.S. of $15 billion or more in goods and services, a current account surplus exceeding 3% of gross domestic product (GDP), and net purchases of dollars exceeding 2% of GDP for at least 8 out of 12 months. Countries meeting all three criteria are subject to enhanced analysis, while those meeting two are designated as monitoring countries.

The Treasury stated in the report released that no country met all three criteria as of the end of the first half of this year. It designated six countries as monitoring countries, including Vietnam, China, Germany, Malaysia, Singapore, and Taiwan. It also removed South Korea and Switzerland from the list and maintained the designation for the other five countries excluding Vietnam.

The Treasury emphasized in the report that "China does not disclose its foreign exchange market interventions and lacks transparency in its exchange rate mechanism," and stated it will continue close monitoring of China.

[Image source=Reuters Yonhap News]

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