The United States has once again included India in its monitoring list of countries with potentially “questionable foreign exchange policies” and “currency manipulation”. This comes a year after India was removed from the watchlist in the US Treasury Department’s semi-annual foreign-exchange report to the US Congress.
What does the term ‘currency manipulator’ mean?
This is a label given by the US government to countries it feels are engaging in “unfair currency practices” by deliberately devaluing their currency against the dollar. The practice would mean that the country in question is artificially lowering the value of its currency to gain an unfair advantage over others. This is because the devaluation would reduce the cost of exports from that country and artificially show a reduction in trade deficits as a result