Photo Credit: Somchai Poomlard
The US Treasury has broadened how it monitors foreign exchange practices, saying it will now scrutinize not only efforts to weaken currencies against the dollar but also actions taken to prevent depreciation.
In its latest semi-annual currency report, covering late 2024 through mid-2025, the Treasury said no major trading partner met all three criteria required to be labeled a currency manipulator.
However, Thailand was added to the Treasury’s monitoring list due to a rising global current account surplus and a growing trade surplus with the United States. The move brings the watchlist to 10 economies: China, Japan, South Korea, Taiwan, Singapore, Vietnam, Germany, Ireland, Switzerland and Thailand.
Previously, US reviews focused mainly on one-sided intervention to stop currencies from strengthening. The Treasury said it will now also assess whether countries act just as aggressively to prevent their currencies from weakening, aiming to detect imbalances in exchange-rate management.
A Treasury official said the revised approach does not target any specific country, including Japan, which has faced pressure from a weak yen. The next report, due in November, will cover the second half of 2025.
The department will also examine other government policies that may influence currency markets, including capital controls, macroprudential tools, sovereign investment activity and the use of foreign exchange swaps.
Under long-standing rules, countries are flagged if they meet two of three thresholds: a US trade surplus of at least $15 billion, a global current account surplus above 3% of GDP, and persistent net foreign exchange purchases equal to 2% of GDP.
China was not labeled a currency manipulator, a step that could have heightened trade tensions. Still, the Treasury again criticized Beijing for a lack of transparency in its exchange-rate policies and warned that it could act in the future if evidence of intervention to prevent yuan appreciation emerges.