US does not designate S. Korea as currency manipulator
Published : Apr 14, 2018 - 10:20
Updated : Apr 15, 2018 - 09:26
The United States declined to designate South Korea as a currency manipulator Friday but kept it on its list of countries to monitor.
In a semiannual report to Congress, the Treasury Department said the currency practices of South Korea and five other countries required close attention but no trading partner met the criteria for a currency manipulator.
"The Treasury Department is working vigorously to ensure that trade is free, fair and reciprocal so American workers and companies can compete and succeed globally," Treasury Secretary Steven Mnuchin said in a statement. "We will continue to monitor and combat unfair currency practices, while encouraging policies and reforms to address large trade imbalances."
Along with South Korea, China, Germany, Japan and Switzerland remained on the monitoring list, while India was added to it.
Treasury Secretary Steven Mnuchin (Yonhap)
To be labeled a currency manipulator, a trading partner must have a bilateral trade surplus with the US of at least US$20 billion, a current account surplus of at least 3 percent of gross domestic product and "persistent, one-sided intervention" where net purchases of foreign currency are conducted repeatedly and total at least 2 percent of GDP over a year.
In South Korea's case, its current account surplus stood at 5.1 percent of GDP last year, and its goods trade surplus with the US
came to $23 billion in the same period.
But it did not exceed the limit on foreign currency purchases.
"Treasury estimates that in 2017 Korean authorities made net purchases of foreign exchange of $9 billion (0.6 percent of GDP), including activity in the forward market," the report said.
Last month, the Korean government said it was considering unveiling how it responded to volatile moves in foreign exchange markets in order to quell speculation that it manipulates exchange rates to support exporters through smoothing operations.
Finance Minister Kim Dong-yeon plans to meet US Treasury Secretary Steven Mnuchin and International Monetary Fund chief Christine Lagarde in Washington during the G-20 finance ministers'
meeting this week to discuss the issue. (Yonhap)
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