The US has asked India to allow the exchange rate to move to reflect economic fundamentals and limit foreign exchange intervention. US Treasury Department added India to the monitoring list countries which are branded as currency manipulators while Switzerland and Vietnam were named as currency manipulators.
"Over the four quarters through June 2020, four major US trading partners -- Vietnam, Switzerland, India, and Singapore -- intervened in the foreign exchange market in a sustained, asymmetric manner," the US Treasury Department said. Treasury found that ten economies warrant placement on Treasury's "Monitoring List" of major trading partners that merit close attention to their currency practices: China, Japan, Korea, Germany, Italy, Singapore, Malaysia, Taiwan, Thailand, and India, the last three being added in this Report.
The US Treasury in its report on trading partners said India met two of the three criteria in this Report, having a material current account surplus and engaging in persistent, one-sided intervention over the reporting period. Treasury will closely monitor and assess the economic trends and foreign exchange policies of each of these economies. The US treasury said on India, "The authorities should allow the exchange rate to move to reflect economic fundamentals and limit foreign exchange intervention to circumstances of disorderly market conditions.