The U.S. Treasury Department officially designated Vietnam and Switzerland as currency manipulators and added three more economies to its monitoring list of major trading partners that merit close attention to their currency practices.
In its semiannual report to Congress, the Treasury said Vietnam and Switzerland met all three criteria for the currency manipulator tag during the four quarters through June. The two countries, along with India and Singapore, allegedly "intervened in the foreign exchange market in a sustained, asymmetric manner," according to the Treasury report.
"Two of these economies — Vietnam and Switzerland — exceeded the two other objective criteria established by Treasury to identify potentially unfair currency practices or excessive external imbalances, which could weigh on U.S. growth or harm U.S. workers and firms," the Treasury said in its report.
The Treasury accused Vietnam and Switzerland of manipulating the exchange rate between their currencies and the U.S. dollar to prevent effective balance of payments adjustments. Vietnam had also acted to gain "competitive advantage in international trade," the Treasury added.
India, Taiwan and Thailand were added to the Treasury's watch list of potential currency manipulators, which includes China, Japan, Korea, Germany, Italy, Singapore and Malaysia. Ireland was removed from the list.
The Treasury urged China to improve exchange rate management transparency, particularly in relation to its official foreign exchange intervention. It also called on Beijing to improve the public understanding of the relationship between the People's Bank of China and the foreign exchange activities of state-owned banks, including the use of foreign exchange derivatives and activities in the offshore renminbi market.