The United States removed India from its currency monitoring watch list on Tuesday. The watch list contains the names of countries that have potentially questionable foreign exchange policies and are suspected to be manipulating their currencies to gain trade advantages over the US.
The treasury department, however, did not remove China from the list. “Treasury continues to urge China to take the necessary steps to avoid a persistently weak currency,” Treasury Secretary Steven Mnuchin said in a statement.
India was placed on the biannual list in October along with China, Japan, Germany, Switzerland and South Korea. Apart from India, Switzerland was dropped from the list. In its biannual foreign-exchange report to the Congress, the US Treasury Department added Ireland, Italy, Malaysia, Singapore and Vietnam to the list.
However, the Donald Trump administration has decided not to label China or any other country currency manipulators. Though the designation does not entail any immediate penalties, it can affect the financial markets. In 1994, China was named a currency manipulator.