World

WASHINGTON – The US Treasury Department added India to its watch list of countries with potentially questionable foreign exchange policies along with China and four others.

According to a report issued on Friday, the Treasury said that the monitoring list includes those major trading partners that merit close attention to their currency practices.

The semi-annual report submitted to Congress by treasury department names five countries on the list from October including China, Germany, Japan, Korea, Switzerland and India.

To ensure improvement in performance is durable and is not due to temporary factors, these countries would remain on the list for two report cycles, said the report.

“We will continue to monitor and combat unfair currency practices while encouraging policies and reforms to address large trade imbalances,” US Treasury Secretary Steven Mnuchin said in a statement.

The Treasury report is required by Congress to identify countries that are trying to artificially manage the value of their currency to gain a trade advantage, for example by keeping the exchange rate low to promote cheaper exports.

The report said that India had a $23bn trade surplus with the US.

India increased its purchases of foreign exchange over the first three quarters of 2017, although the rupee still rose in value, it further said.

China, which is at the centre of a brewing trade dispute with Washington remained on the watch list because the Chinese currency generally moved against the dollar in a direction that should help reduce China’s trade surplus with the United States.

Germany also remained on the watch list, even though it is part of the European currency union, which means it cannot independently control the exchange rate for the euro.