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MNI POLICY: U.S. Currency Report Drops 'Manipulator' Label


Insufficient evidence to add trading partners as currency manipulators, Treasury says.

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The U.S. Treasury said Friday Taiwan, Switzerland, and Vietnam may be manipulating their currency, but there's insufficient evidence to formally label the countries currency manipulators.

In its semi-annual currency manipulation report, the Treasury said over the four quarters through December 2020, five major U.S. trading partners -- Vietnam, Switzerland, Taiwan, India, and Singapore -- intervened in the foreign exchange market in a sustained, asymmetric manner with the effect of weakening their currencies.

Three of the economies — Vietnam, Switzerland, and Taiwan — exceeded the two other thresholds established by Treasury to identify potentially unfair currency practices or excessive external imbalances, which could impede U.S. growth or harm U.S. workers and firms.


But Treasury officials refrained from formally labelling any country a currency manipulator, citing in part impacts from Covid-19 in 2020 making it more challenging to make a designation.

While Vietnam, Switzerland, and Vietnam met the criteria under 2015 legislation, Treasury officials said there is insufficient evidence to make a finding that the three counties manipulate their exchange rates under 1988 legislation.

Foreign exchange analysts had anticipated the continued U.S. Treasury manipulator designation for Switzerland and Vietnam, and anticipated that Taiwan and Thailand could also be labelled. To be labeled a manipulator, countries must at least have a USD20 billion-plus bilateral trade surplus with the United States, foreign currency intervention exceeding 2% of gross domestic product and a global current account surplus exceeding 2% of GDP.

The U.S. Treasury also said its "monitoring list" of countries that meet some of the criteria has grown to 11, adding Ireland and Mexico.

Others on the list include China, Japan, Korea, Germany, Ireland, Italy, India, Malaysia, Singapore, Thailand, and Mexico.