US monitors India for “unfair currency practices”

Alleging currency undervaluation, US has added the India to its list of economies to watch out for unfair practices and macroeconomic policies. The semi-annual report on US’ trade partners’ macroeconomic & foreign exchange policies also includes other leading economies such as China, Japan, Korea, Switzerland and Germany.

In the backdrop of the RBI purchasing foreign exchange over the first 3 quarters of 2017, the report said – “Given that Indian foreign exchange reserves are ample by common metrics, and that India maintains some controls on both inbound and outbound flows of private capital, further reserve accumulation does not appear necessary”. However, it also noted that the Indian rupee is predominantly market-dominated & intervention only happens during volatile situations.