{"id":2202697,"date":"2023-11-09T08:00:04","date_gmt":"2023-11-08T23:00:04","guid":{"rendered":"https:\/\/koreapro.org\/?p=2202697"},"modified":"2023-11-08T18:13:18","modified_gmt":"2023-11-08T09:13:18","slug":"us-drops-south-korea-from-fx-monitoring-list-for-the-first-time-in-7-years","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2023\/11\/us-drops-south-korea-from-fx-monitoring-list-for-the-first-time-in-7-years\/","title":{"rendered":"US drops South Korea from FX monitoring list for the first time in 7 years"},"content":{"rendered":"<p>South Korea was removed from the list of countries subject to the U.S.\u2019 exchange rate monitoring for the first time in seven years, a biannual U.S. Treasury Department report revealed on <a href=\"https:\/\/en.yna.co.kr\/view\/AEN20231108003800315\">Tuesday<\/a>. South Korea has been on the list since April 2016. China, Germany, Malaysia, Singapore, Taiwan and Vietnam were <a href=\"https:\/\/www.hani.co.kr\/arti\/international\/america\/1115383.html\">included<\/a> as \u201cwatchlist\u201d countries, while the ROK and Switzerland were excluded.<\/p>\n<p>Korea was <a href=\"https:\/\/en.yna.co.kr\/view\/AEN20231108003800315\">removed<\/a> from the list for not meeting two of the three criteria in the Trade Facilitation and Trade Enforcement Act of 2015, known as the <a href=\"https:\/\/www.congress.gov\/114\/plaws\/publ125\/PLAW-114publ125.pdf\">2015 Act<\/a>. The U.S. Treasury Department evaluates the macroeconomic and exchange rate policies of its top trading partners. If these countries meet two out of three criteria, they are designated as \u201cwatchlist\u201d countries. If all three are met, they are considered potential currency manipulators that require \u201cenhanced analysis.\u201d The criteria <a href=\"https:\/\/www.yna.co.kr\/view\/AKR20231108012900071\">involve<\/a> a bilateral trade surplus of a minimum of $15 billion or more with the U.S., a current account surplus surpassing 3% of a country&#8217;s gross domestic product (GDP), and continuous one-sided foreign currency market intervention for a minimum of eight months, with net purchases amounting to at least 2% of a country&#8217;s GDP within a year.<\/p>\n<p><strong>Why It Matters<\/strong><\/p>\n<p>A country\u2019s inclusion in the U.S. Treasury Department\u2019s watchlist does not amount to sanctions or material disadvantages, and is largely a <a href=\"https:\/\/m.koreatimes.co.kr\/pages\/article.asp?newsIdx=362827\">symbolic<\/a> move. However, South Korea\u2019s removal from the list can <a href=\"https:\/\/www.donga.com\/news\/Economy\/article\/all\/20231108\/122083209\/1\">reduce<\/a> the risk of it being further labeled as a currency manipulator in the future, and positively impact foreign investment and export attraction, according to <a href=\"https:\/\/www.donga.com\/news\/Economy\/article\/all\/20231108\/122083209\/1\">experts<\/a>. A Bank of Korea official <a href=\"https:\/\/www.donga.com\/news\/Economy\/article\/all\/20231108\/122083209\/1\">speaking<\/a> anonymously on Wednesday interpreted the exclusion as South Korea\u2019s step toward being recognized as having a \u201ctransparent\u201d foreign exchange policy and rates.<\/p>\n<p>However, while the impact might be positive, the reason for the exclusion is not, as it was primarily due to its <a href=\"https:\/\/news.mt.co.kr\/mtview.php?no=2023110810314177859\">failure<\/a> to meet the current account surplus criterion. The U.S. Treasury&#8217;s report revealed that South Korea&#8217;s current account surplus was just <a href=\"https:\/\/news.mt.co.kr\/mtview.php?no=2023110810314177859\">0.5%<\/a> of its GDP, well below the required &#8220;3% or more.\u201d This reflects the South Korean economy\u2019s struggles in the past year, with the ratio of the current account surplus to GDP <a href=\"https:\/\/news.mt.co.kr\/mtview.php?no=2023110810314177859\">dropping<\/a> from 4.7% in 2021 to 1.8% last year and this year\u2019s recurrent deficits.<\/p>\n<div class=\"content-tags\"><a href=\"https:\/\/koreapro.org\/tag\/business-economy\/\"><span class=\"tag\">Business &amp; Economy<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"<p>South Korea was removed from the list of countries subject to the U.S.\u2019 exchange rate monitoring for the first time in seven years, a biannual U.S. Treasury Department report revealed on Tuesday. South Korea has been on the list since April 2016. China, Germany, Malaysia, Singapore, Taiwan and Vietnam were included as \u201cwatchlist\u201d countries, while [&hellip;]<\/p>\n","protected":false},"author":5770,"featured_media":2202698,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[24],"class_list":["post-2202697","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-briefings","tag-business-economy"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>US drops South Korea from FX monitoring list for the first time in 7 years - KOREA PRO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2023\/11\/us-drops-south-korea-from-fx-monitoring-list-for-the-first-time-in-7-years\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"US drops South Korea from FX monitoring list for the first time in 7 years - KOREA PRO\" \/>\n<meta property=\"og:description\" content=\"South Korea was removed from the list of countries subject to the U.S.\u2019 exchange rate monitoring for the first time in seven years, a biannual U.S. Treasury Department report revealed on Tuesday. 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