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S. Korea excluded from US 'monitoring list' for FX policy for 2nd straight time

June 21, 2024 - 09:46 By Yonhap
The Treasury Department's Report to Congress on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States (US department of the Treasury)

The United States took South Korea off its list of countries to monitor for their foreign exchange policies for the second consecutive time while adding Japan to the list, a Treasury Department report showed Thursday.

The department released the semiannual "Report to Congress on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States" following its November report, where South Korea was excluded from the list for the first time since April 2016.

The latest monitoring list comprised China, Japan, Taiwan, Malaysia, Singapore, Vietnam and Germany.

US trading partners are put on the list when they meet two of the three criteria set by the US Trade Facilitation and Trade Enforcement Act of 2015, also known as the 2015 Act.

The criteria are a bilateral trade surplus with the US of at least $15 billion, a material current account surplus of at least 3 percent of gross domestic product (GDP) and persistent, one-sided intervention in the foreign currency market in at least eight months during a year and with net purchases totaling at least 2 percent of an economy's GDP over a 12-month period.

"Japan, Taiwan, Vietnam, and Germany all meet the criteria for having a significant bilateral surplus and a material current account surplus, and Singapore meets the criteria for engaging in persistent, one-sided foreign exchange intervention and having a material current account surplus," the department said in the report.

"Malaysia met two criteria in the last Report, but only the significant bilateral surplus criterion in this Report," it added.

On China, the department said that China's failure to publish foreign exchange intervention and broader lack of transparency around key features of its exchange rate mechanism continues to make it an outlier among major economies and warrants its close monitoring. (Yonhap)