The United States, on Friday, added 11 countries in the currency monitoring list. Some of these countries include India, China, Japan, South Korea, Germany, and Italy. The Department of Treasury named other countries such as Ireland, Malaysia, Singapore, Thailand, and Mexico in its quarterly report to Congress, the first under the Biden administration.

All countries except Ireland and Mexico were included within the December 2020 report, which was presented by the previous Trump administration. The treasury has created a monitoring list of major trading partners as per the directions of the Congress. This has been carried out to keep a close attention on the currency practices and macroeconomic policies of these countries.

All those economies which meet two of the three criteria in the 2015 act have been placed on the monitoring list.

These persistent one-sided interventions in the foreign exchange market happens when net purchases of foreign currency are conducted repeatedly in a minimum of 6 out of 12 months. These interventions also happen when the net purchases sum up to at least 2% of an economy’s GDP over a period of 12 months.

Additionally, the Treasury will add and retain any major US trading partner on the monitoring list that accounts for a large and disproportionate share of the US trade deficit. According to the treasury, this may happen even if that economy does not fulfill two of the three criteria from the 2015 act.

The report stated that some economies have persistently conducted one-sided foreign exchange market intervention. The treasury alleged that five major US trading partners – India, Vietnam, Switzerland, Taiwan, and Singapore have intervened in the foreign exchange market in a sustained and asymmetric manner. This has weakened the currencies of the respective countries.

The report also states that the China exceeded other countries in terms of economic growth in 2020. However, it has been driven by the increasing external demand of medical supplies, PPE equipment, and electronics.

The four quarters through December 2020 witnessed several economies experience significant growth in their current account surpluses. This is because the pandemic has drastically affected the global trade of countries such as China, Taiwan, and Singapore. However, the report added that other economies like Germany and Vietnam have maintained large current account surpluses. This has created room for widening of external asset stock positions.