Image Control: moneycontrol.com
The US Treasury Department made a report contained the name of 11 countries on the monitoring list of major trade partners- China, India, Mexico, Japan, South Korea, Thailand, Singapore, Ireland, Germany, Italy and Malaysia. Out of these countries, 9 were also on the December 2020 watchlist and India is one of those countries. India was also put in 2018 on the same list but removed in 2019.
The US Treasury Department has specified 3-point criteria through which it measures economies for currency manipulation. These are:-
1. Bilateral trade surplus with the US of more than $20 billion.
2. Current account surplus of at least 3% of GDP
3. Net purchase of foreign currency of 2% of GDP over 12 months.
India met the 2 criteria out of these 3. India's good trade surplus with the US is $24 billion and also India has a surplus of $8 billion in the service sector. The RBI bought foreign currency worth 5% of its GDP which is $131 billion. Countries often weaken their currency for increasing their import.