● Currency Manipulator is a label given by the US Treasury Department to countries that deliberately influence the exchange rate between their currency and the US dollar to gain unfair competitive advantage in international trade.
● Criteria: To be labeled as a currency manipulator by US, countries must meet at least two of the three criteria’s:
○ A significant (at least $20 billion) bilateral trade surplus
○ A material current account surplus, and
○ A ‘persistent one-sided intervention’ in forex markets.
● Consequence: The designation of a country as a currency manipulator does not immediately attract any penalties but tends to lower the confidence about a country in the global financial markets.
Why in News? The US treasury has placed India along with 10 other countries on its currency manipulator watch list.
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