U.S. removes Korea from currency monitoring list

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U.S. removes Korea from currency monitoring list

Published: 08 Nov. 2023, 09:09 Updated: 08 Nov. 2023, 16:25

PARK EUN-JEE
park.eunjee@joongang.co.kr

An image of dollar is shown at Hana Bank’s Counterfeit Notes Response Center in central Seoul on Nov.3. [YONHAP]

The United States removed Korea from the list of countries on its currency monitoring list, lifting the country from the scrutiny first placed in 2016.

The U.S. Treasury said on Tuesday that Vietnam, China, Germany, Malaysia, Singapore and Taiwan were included on the monitoring list, while Switzerland was also taken out.

Korea had been on the list since April 2016, excluding a brief respite in the first half of 2019.

Countries that meet at least two of three criteria — a bilateral trade surplus of over $15 billion with the United States, a material current account surplus of more than 3 percent of a country’s GDP, or persistent one-sided intervention in the foreign currency market — are named on the list.

Korea met only one criterion — the trade surplus of more than $15 billion — during the concerned period; the country generated a $38 billion surplus.

Its current account surplus accounts for 0.5 percent of its total GDP for the year, and net purchases of foreign currency fell short of 2 percent of GDP, which spares Korea from the label of currency manipulator.

“In addition to Switzerland, Korea was removed from the Monitoring List in this Report, having met only one out of three criteria in the 2015 Act for two consecutive Reports,” the Treasury said in the report.

Vietnam was brought back to the watch list. Five countries that were previously on the list still remains

“Most foreign exchange intervention by U.S. trading partners over the Report period was in the form of selling dollars, actions that served to strengthen their currencies,” said U.S. Treasury Secretary Janet Yellen in a statement.

“However, Treasury remains vigilant to countries’ currency practices, and the Biden Administration strongly opposes attempts by the United States’ trading partners to artificially manipulate currency values to gain unfair advantage over American workers,” the Secretary said.

The department noted that China is currently subject to “close monitoring” for its failure to publish foreign exchange interventions and for a broader lack of transparency around key features of its exchange rate mechanism.

“China has met at least one of the three criteria in every Report since the October 2016 Report. For the four quarters ending June 2023, China meets one of the three criteria (significant bilateral trade surplus) and remains on the Monitoring List due to the size of the bilateral surplus with the United States and its lack of transparency on intervention data,” it noted in the report.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]