US Treasury strengthens foreign exchange monitoring, but finds no manipulation

WASHINGTON – The US Treasury on Jan 29 said it is strengthening scrutiny of countries’ foreign exchange practices, including any efforts to resist depreciation of their currencies against the dollar, but did not accuse any major trading partner of currency manipulation.

In its latest semi-annual currency report, the Treasury said no major trading partner met all three criteria for enhanced analysis of currency practices during the second half of 2024 and the first six months of 2025.

The Treasury added Thailand to its “monitoring list” of economies warranting close attention due to the growth of the Asian country’s global current account surplus and its trade surplus with the US.

The addition brings the monitoring list to 10 economies, with China, Japan, South Korea, Taiwan, Singapore, Vietnam, Germany, Ireland and Switzerland also remaining on it.

The report, initially due in November, has been traditionally focused on whether countries are engaging in one-sided currency intervention or other manipulation to resist appreciation against the dollar to keep their exports cheaper.

But going forward, the Treasury “is now monitoring more broadly the extent to which economies that choose to smooth exchange rate movements do so to resist depreciation pressure in the same manner as they do to resist appreciation pressure”, it said.

Asked if the change was meant to scrutinise Japan’s currency practices more closely amid recent yen weakness, a Treasury official said the changes were not meant to single out any one country, but to aid the department’s analysis during a future period in which the dollar has been depreciating. REUTERS