By Kaveesha Fernando
WASHINGTON, USA (CWBN)_ Switzerland and Vietnam were labelled currency manipulators by the United States Treasury on Wednesday (December 17), while ten other nations were placed on a treasury watch list on suspicion of currency manipulation.
China has been included in the watch list. The other countries listed are India, Japan, Germany, Singapore, Italy, Korea, Taiwan, Thailand and Malaysia. Vietnam was on the 2019 watch list, while Switzerland was removed from last May’s list.
“Currency manipulator” is a designation given by the US government for countries which the US Treasury feels have devalued their currency to promote exports. When a country’s currency is devalued, the purchasing power of the US dollar rises, which in turn leads to a rise in exports from that nation.
The Swiss National Bank (SNB) reiterated that they would not be changing their monetary policy on the basis of the US Treasury Department’s report. In a statement released on Wednesday (December 17), the SNB stated it does not manipulate Swiss currency.
“The coronavirus pandemic is continuing to have a strong adverse effect on the economy. Against this difficult backdrop, the SNB is maintaining its expansionary monetary policy with a view to stabilising economic activity and price developments,” SNB said Wednesday’s statement.
The US is extremely conscious of currency manipulation because such tactics could lead to foreign imports becoming cheaper than domestic goods, thus affecting the US economy and job market.
Unsurprisingly, China has been labelled a currency manipulator in the past, and reports indicate that the Asian superpower is known to devalue its currency in order to accelerate economic development.
