Salem Radio Network News Friday, January 28, 2022


U.S. Treasury says Vietnam, Taiwan exceed currency thresholds, but no manipulator labels

By David Lawder and Andrea Shalal

(Reuters) -The U.S. Treasury Department on Friday said Vietnam and Taiwan continued to exceed its thresholds for possible currency manipulation and enhanced analysis under a 2015 U.S. trade law, but refrained from formally branding them as manipulators.

The Treasury said that in its semi-annual currency report, during the year through June 2021 no major U.S. trading partners sought to manipulate their currencies for a trade advantage or for preventing effective balance of payments adjustments under a 1988 law.

It said that Vietnam and Taiwan exceeded its trade surplus, current account and foreign exchange intervention thresholds, and it will continue to work with them to address U.S. concerns.

Treasury said it was “satisfied with progress made by Vietnam to date” and continue engagement started in May with Taiwan.

“This engagement includes urging the development of a plan with specific actions to address the underlying causes of currency undervaluation and external imbalances,” Treasury said of the Taiwan engagement.

Treasury said Switzerland, which was labeled a manipulator in 2020 by the Trump administration, tripped only two out of the three thresholds, but would continue to conduct an in-depth analysis of Switzerland’s practices for at least another year.

Treasury said it moved Switzerland to its “Monitoring List” of major trading partners that merit close attention to their currency practices, along with 11 other countries: China, Japan, South Korea, Germany, Ireland, Italy, India, Malaysia, Singapore, Thailand, and Mexico.


The report did not spark any significant immediate moves in the Taiwan dollar, the Vietnamese dong or the Swiss franc.

A Taiwanese central bank official said discussions with Washington would continue but blamed Taiwan’s large trade deficit with the United States on strong demand for technology products fueled by the COVID-19 pandemic and productions shifts prompted by tariffs on Chinese goods.

Switzerland’s finance ministry repeated its longstanding denial that the country’s central bank engages in manipulation of the franc for an economic advantage.

“Foreign exchange interventions are necessary for Swiss monetary policy in order to maintain appropriate monetary conditions and thus price stability,” the ministry said in a statement.

The Treasury report criticized China’s lack of transparency in its foreign exchange practices, citing a wide discrepancy between the People’s Bank of China’s foreign exchange asset and net foreign exchange settlement data, suggesting that state owned banks were being used to conduct official interventions.

“Treasury will continue to closely monitor China‚Äôs use of exchange rate management, capital flow, and macroprudential measures and their potential impact on the exchange rate,” it said in the report.

A Reuters analysis in June found that Chinese banks had amassed over $1 trillion, posing a risk to the government’s ability to control the yuan exchange rate.

Yellen told the Reuters Next virtual conference on Thursday that she would continue to engage with her Chinese counterpart, Vice Premier Liu He, on foreign exchange policy issues.


In the second currency report issued by the Biden administration, the Treasury also adjusted the three manipulation thresholds under the 2015 law to include slightly broader measures of trade surpluses, foreign exchange interventions and current account surpluses.

A Treasury official said Switzerland would have triggered three of the old thresholds, but only two under the new measurements.

“Treasury is working relentlessly to promote a stronger and more balanced global recovery that benefits American workers, including through close engagement with major economies on currency-related issues,” Treasury Secretary Janet Yellen said in a statement accompanying the report.

(Reporting by David Lawder and Andrea Shalal;Editing by Dan Burns and Chizu Nomiyama)


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