US Retains China and Japan in Currency Monitoring List

JAKARTA - The United States has retained China, Japan, Thailand, and seven other major trading partners on its exchange rate monitoring list. However, none of them were designated as currency manipulators, a status that could pave the way for US sanctions.

Kyodo News, quoted on Friday, July 23, said the decision was included in a US Department of the Treasury report to Congress. The report, which is published twice a year, assesses economic and monetary policies through 2025.

In addition to China, Japan, and Thailand, the list includes Germany, Ireland, Singapore, South Korea, Switzerland, Taiwan, and Vietnam.

The U.S. Treasury Department uses the list to monitor possible exchange rate practices that give unfair trade advantages.

China is in the spotlight. The report assesses that Beijing is still less transparent in explaining its exchange rate policies and practices compared to other major US trading partners.

"China continues to stand out among our major trading partners for its relatively lack of transparency in its exchange rate policies and practices," the report said.

A country is included in the list if it meets two of the three criteria. The criteria are a trade surplus of goods with the US of at least 15 billion US dollars, a current account surplus of at least 3 percent of gross domestic product, or continuous and consistent foreign exchange intervention.

A current account surplus occurs when a country's receipts from abroad are greater than its expenditures.

Foreign exchange intervention is the act of buying or selling a currency to influence its exchange rate.

For Japan, the report said there was no intervention in the currency market during the assessment period. Japan was also judged to be very transparent in reporting currency intervention activities.

The Japanese government publishes the total number of interventions each month. Daily details are announced every three months.

The report also highlighted the yen's continued weakness despite the narrowing gap between US and Japanese interest rates.

"Although global factors such as financial market turmoil and oil prices are likely to affect the yen, excessive yen turmoil is undesirable," the report said.