Global Currency Dynamics Shift as Treasury Eyes Exchange Transparency

In 2024, the U.S. Treasury reported no major trading partners were manipulating their currency. However, China and other countries faced heightened scrutiny due to transparency issues. The monitoring list grew with Ireland and Switzerland's additions. Despite past tensions, Treasury aims to ensure fair exchange rate practices globally.

The U.S. Treasury Department's first semi-annual currency report under President Donald Trump's new administration revealed that no major trading partner manipulated their currency in 2024. However, the 'monitoring list' now includes nine countries, with Ireland and Switzerland added due to their significant trade surpluses with the United States.

While China was not labeled as a currency manipulator, the Treasury issued a strong warning about China's lack of transparency concerning its exchange rate policies. The Treasury emphasized that China could still be designated a manipulator if evidence showed intervention to resist the yuan's appreciation in the future.

The report highlights the broad strengthening of the U.S. dollar in 2024, which reduced the likelihood of consistent foreign currency weakening. Nevertheless, the Treasury remains vigilant, especially concerning China's potential use of sovereign wealth and pension funds to influence exchange markets.

(With inputs from agencies.)