The United States has removed Malaysia from its “currency monitoring list” and added South Korea as a new entry, according to a report released Thursday by the U.S. Treasury Department.
The semi-annual report examines major trading partners with large trade surpluses with the U.S. and those who engage in foreign exchange market interventions that could provide them with an unfair competitive advantage.
The Treasury’s latest findings indicated that no major U.S. trading partner had manipulated its currency to prevent “effective balance of payments adjustments” or gain an unfair edge in global trade during the four quarters leading up to June 2024.
South Korea joins China, Japan, Taiwan, Singapore, Vietnam, and Germany on the list of countries under closer scrutiny. Among these, Japan, South Korea, Taiwan, Vietnam, and Germany met two of three criteria for enhanced monitoring. These criteria include having a significant bilateral trade surplus with the U.S. and a notable current account surplus.
Singapore was noted for “persistent, one-sided foreign exchange intervention.”
The Treasury also emphasized China’s continued inclusion on the monitoring list, citing its lack of transparency regarding foreign exchange interventions and the broader exchange rate mechanism. The report characterized China as an “outlier” compared to other major economies, noting its large trade imbalance with the U.S.
Treasury Secretary Janet Yellen reiterated the U.S. position, urging major trading partners to adopt policies that support balanced and sustainable global economic growth while addressing excessive external imbalances.