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WASHINGTON, Dec. 16 (Reuters) – The United States government listed Switzerland and Vietnam as currency manipulators on Wednesday. This is another attack on international trading partners that may compound the problems facing the incoming team of US President-elect Biden.
In a report on the long-delayed exchange rate, the US Treasury Department also put India, Thailand and Taiwan on the watch list, suspecting that they could deliberately devalue their currencies against the US dollar.
The new corona pandemic has distorted trade flows and increased the United States’ deficit with its trading partners. Four years ago, Trump was elected president of the United States in part because he promised to reduce the United States trade deficit.
The Swiss National Bank said the bank has not manipulated its own currency and that its monetary policy will remain unchanged, adding that the bank “is still willing to intervene more strongly in the foreign exchange market.”
The US classification of Switzerland as a currency manipulator once pushed up the Swiss franc against the US dollar. Currency strategists said this move may make it somewhat difficult for the Swiss National Bank to intervene in the market, and easing the new corona virus epidemic will reduce upward pressure on the Swiss franc to hedge.
Vietnam’s Ministry of Commerce declined to comment on the report.
This move will increase pressure on Biden before he takes office as US president, said Per Hammered, SEB’s chief emerging markets strategist.
An official from the US Treasury Department said he had not informed Biden’s transition team, adding: “They have nothing to do with this matter.”
Yellen, the nominee for the next US Treasury secretary, can adjust the results in her first exchange rate report scheduled for April.
A spokesperson for Biden’s transition team did not respond to a request for comment.
Biden’s team has been criticizing some other measures taken by US Treasury Secretary Mnuchin, including ending the Fed’s epidemic loan program.
The three conditions for the United States to define a currency manipulator include: a trade surplus with the United States that exceeds $ 20 billion per year, a scale of foreign exchange intervention that exceeds 2% of gross domestic product (GDP), and a global current account surplus exceeding 2% of GDP.
** Add Taiwan to watch list **
Due to the high trade surplus with the United States, China has been on the watch list of the United States Department of the Treasury.
In August 2019, when trade tensions between China and the US were at their worst, the United States listed China as a currency manipulator. In January this year, two days before the world’s two largest economies signed the “Phase One” trade deal, Mnuchin lifted his identification as a currency manipulator.
The US Treasury Department also declared that it would include Taiwan, Thailand and India on the “watch list,” which also includes China, Japan, South Korea, Germany, Italy, Singapore and Malaysia.
The Finance Ministry report also noted that India and Singapore had previously intervened in the foreign exchange market in a “continuous and asymmetric manner”, but did not meet other criteria for defining exchange rate manipulators. (End up)
Compiled by Li Jun; Revised Mother Red / Liu Jing
