The Centre has expressed surprise at the United States’ decision to put India on a monitoring list of currency manipulators.
“I don’t understand any economic logic (behind the decision),” Commerce Secretary Anup Wadhawan told reporters on Tuesday.
He informed that the RBI is following a policy that facilitates currency movements based on market forces.
The US Treasury Department had last week put India along with 10 other countries namely China, Japan, Germany and Singapore among others on its “Monitoring List” which needed close scrutiny of their currency practices.
Mr Wadhawan said that India’s trade surplus with the US had gone up by $5 billion during the financial year 2020-21.
India’s bilateral trade surplus in goods with the United States was worth $24 billion in 2020, along with a services trade surplus of $8 billion, the US Treasury Department report said.
The report on “Macroeconomics and Foreign Exchange Policies of Major Trading Partners of the United States”, monitors currency practices of US’ 20 biggest trade partners.
It reviews currency practices on three criterion namely a major bilateral trade surplus (which should be at least $20 billion), a significant current account surplus and persistent one-sided intervention in forex markets.
India is learnt to have met two of the three criterion – trade surplus and the “one-sided intervention in forex markets”.