Korea excluded from US 'monitoring list" for FX policy for 1st time since 2016
U.S. Treasury Secretary Janet Yellen delivers remarks at the headquarters of the Internal Revenue Service (IRS), in Washington, Nov. 7. EPA-Yonhap
The United States has taken Korea off its list of countries to monitor for their foreign exchange policies, a Treasury Department report showed Tuesday, marking the Asian country's first exclusion in more than seven years.
The department released the semiannual Report to Congress on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States following its June report. Korea had been included on the list since April 2016.
The latest list includes China, Germany, Malaysia, Singapore, Taiwan and Vietnam, while Korea and Switzerland were removed.
U.S. trading partners are put on the list when they meet two of the three criteria set by the U.S. Trade Facilitation and Trade Enforcement Act of 2015, also known as the 2015 Act.
The criteria are a bilateral trade surplus of at least $15 billion with the U.S., a material current account surplus of at least 3 percent of a country's gross domestic product and persistent, one-sided intervention in the foreign currency market in at least eight months of a year with net purchases totaling at least 2 percent of an economy's GDP over a 12-month period.
"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 report reads, referring to the criteria on a trade surplus.
It also noted that the department found that no major trading partners met all three criteria under the 2015 Act during the four quarters ending in June this year, such that no major trading partners require "enhanced analysis."
On China, the report said the world's second-largest economy's failure to publish foreign exchange interventions and broader lack of transparency around key features of its exchange rate mechanism continue to make it an "outlier" among major economies and warrant the department's close monitoring.
"It remains on the Monitoring List for this reason as well as due to its outsized trade imbalance with the United States," it said. (Yonhap)