The treasury department report, however, did not specifically mention the criteria India had met to be now delisted. Economists believe it might be a drawdown in India’s forex accumulation over the past year.

India’s forex reserves have fallen by $105 billion since the beginning of 2022, to $530 billion in the week ended Nov. 11, RBI data show. The central bank had deployed dollars to soften the rupee’s fall (by 8.5% this year alone).

How does the US assess its trading partners for the list?

The US reviews its training partners’ exchange rate policies through three criteria:

The economies that meet two or all three of these criteria are placed on the currency monitoring list under US legislation. Once on it, the country is deemed a “currency manipulator.” It will then be assessed on improvements and durable performance for at least two consecutive reports.

India’s trade with the US

The US is one of the few countries with which India has a trade surplus. In the four quarters through June 2022, this surplus stood at $48 billion, ensuring that the country met one of the three criteria, the treasury department report stated.

It primarily exports polished diamonds, pharmaceutical products, jewellery, light oil and petroleum, frozen shrimp, and cosmetics, among other items. India’s imports from the US include oil, liquified natural gas, gold, coal, recycled products and scrap iron, large almonds, and more.

India is a current account deficit country

India has traditionally had a current account deficit for years. On that account, it didn’t meet the second criterion to be on the US’s currency monitoring list.

In the quarter-ended June 2022, the deficit was $23.9 billion, 2.8% of the GDP, compared with a deficit of $13.4 billion in the previous quarter.

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