India on its Watch List of Currency Manipulators

Why in News?

India is included in the watch list of  currency manipulation of  US Treasury Department .

Vietnam and Switzerland are already included as currency manipulators.

Previously in  2019, the U.S. Treasury Department removed India from its currency manipulators watch list .

What are the countries in the watch list?

India, Taiwan, and Thailand have joined the  seven countries on the watch list.

The existing countries list include China, Japan, South Korea, Germany, Italy, Singapore, and Malaysia.

What is a currency manipulator?

Currency manipulator is a label that the U.S. Treasury Department  puts on a country that intends "unfair currency practices" and  deliberately devalue its currency against the U.S. dollar .

 The devaluation of the currency will reduce the country’s export costs, thereby artificially showing a reduction in the trade deficit.

What is devaluation ?

A devaluation is an official lowering of the value of a country's currency within a fixed exchange-rate system,
A devaluation occurs when a country makes a conscious decision to lower its exchange rate in a fixed or semi-fixed exchange rate.

A depreciation is when there is a fall in the value of a currency in a floating exchange rate.

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