SINGAPORE: Thailand was not included on the latest watch list of “currency manipulators” issued by the US Treasury.
In its semi-annual report released Monday in Washington, the Treasury cited 10 countries that are possibly using their exchange rates to gain an export advantage over the US. Three of them -- Singapore, Malaysia, and Vietnam -- were from Southeast Asia and retained on the list from May 2019, as expected.
Thailand’s goods trade surplus with the US soared past the critical $20 billion mark in the 12 months through November, according to US Census Bureau data, while its current account surplus exceeds 2% of GDP. However, the currency’s almost 9% surge against the dollar last year, the best performer in Asia, means “no one should consider Thailand as one that has tried to manipulate” its exchange rate to gain an export advantage, the nation’s central bank governor said in an interview last week.
By rule, the Treasury retains countries on the monitoring list for at least two consecutive reports when they are first cited, hence it kept Singapore, Malaysia and Vietnam on the list.
The Treasury found that Vietnam had violated only one of the three criteria in the latest report, down from two in May.
Here’s how each of the major Southeast Asian economies fare in the US Treasury currency report, which is mainly based on data through June 2019:
Thailand: Not named on watchlist, though Treasury said it’s close to triggering key thresholds. It met one of the Treasury’s criteria, with a current-account surplus estimated at 5.3% of GDP
Indonesia and the Philippines: No mention at all in report
Singapore: Exceeded two of the three thresholds, with a current account surplus estimated at 17.9% of GDP and net foreign-exchange purchases of 9% of GDP. Treasury remains concerned about high savings rates, while also acknowledging the central bank uses the foreign exchange rate rather than interest rates as key policy tool
Malaysia: Exceeded two of the three thresholds, with a bilateral goods surplus of $26 billion and a current account surplus of 3% of GDP
Vietnam: Exceeded one of three thresholds, with a bilateral goods surplus of $47 billion, the sixth-highest among the U.S.’s major trading partners. Vietnam’s current account surplus weakened to below 2% of GDP